Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/67960
Authors: 
Stark, Oded
Sorger, Gerhard
Year of Publication: 
2012
Series/Report no.: 
University of Tübingen Working Papers in Economics and Finance 47
Abstract: 
We demonstrate that a rank-preserving transfer from a richer individual to a poorer individual can exacerbate income inequality (when inequality is measured by the Gini coefficient). This happens when individuals' preferences depend negatively not only on work time (effort) but also on low relative income. It is rigorously shown that the set of preference profiles that gives rise to this perverse effect of a transfer on inequality is a non-empty open subset of all preference profiles. A robust example illustrates this result.
Subjects: 
A rank-preserving inequality-narrowing transfer
The Gini coefficient
Low relative income
Relative deprivation
Exacerbated inequality
JEL: 
D30
D31
D63
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
221.16 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.