Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105015
Authors: 
Ebert, Udo
Moyes, Patrick
Year of Publication: 
2010
Series/Report no.: 
Wirtschaftswissenschaftliche Diskussionspapiere V-327-10
Abstract: 
The distribution of gross income net of taxes and transfers - or equivalenty consumption - is generally considered a reasonable approximation of the distribution of well-being in the society. One typically observes differing trends in the distribution of gross incomes across countries or within the same country over time. Where do these inequalities originate from? Considering a simple model with no taxation and where individuals belonging to the same society have identical preferences but different productivities, we investigate the impact on the distribution of gross income of changes in the way productivities are distributed. We also look for those changes in the common preference ordering that result in more equally distributed incomes when the allocation of productivities is fixed. Finally, we want to know how preferences have to be adjusted for less dispersed talents to always imply more evenly distributed incomes.
Subjects: 
Well-Being
Inequality
Talents
Preferences
Lorenz Dominance
JEL: 
D31
D61
Document Type: 
Working Paper

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