Measuring opportunity inequality with monetary transfers |
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Authors: | Laurence Kranich |
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Institution: | 1. Department of Economics, University at Albany, SUNY, Albany, NY, 12222, USA
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Abstract: | In this paper I consider the problem of measuring opportunity inequality when monetary transfers are possible. First, I consider
the case in which agents have common evaluations (or identical preferences), as in the previous literature. I then propose
an extension to the heterogeneous case. In both cases I identify an appropriate egalitarian benchmark relative to which inequality
can be measured, and I establish that this yields a theory of measurement analogous to that of income inequality. Consequently,
the introduction of money (or an infinitely divisible commodity) avoids the difficulty reported in Ok (J Econ Theory 77:300–329,
1997). The results of the paper are immediately applicable to the measurement of multidimensional economic inequality including
economies with indivisible goods. |
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Keywords: | |
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