Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273820 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2023-009/VIII
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
When income inequality increases when average income levels increase, rises in average income levels might result in inequality costs. This paper develops marginal social welfare measures that account for the possibility that income inequality changes when average income levels change. Applications are given for the city of Amsterdam, The Netherlands. For this city, the income elasticity of the Gini is estimated in the range 0.25-0.48. Estimates of marginal welfare changes vary greatly with model choice. For plausible cases, estimates can be negative, raising doubts whether average income increases are beneficial in rich urban areas with high valuations of equality where income inequality increases in income.
Subjects: 
Social welfare
income inequality
inequity aversion
post-growth
JEL: 
A13
D61
D63
E24
Document Type: 
Working Paper

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