Please use this identifier to cite or link to this item:
Figari, Francesco
Paulus, Alari
Year of Publication: 
Series/Report no.: 
EUROMOD Working Paper EM15/13
This paper investigates how the distribution of income changes when the standard definition of disposable income is replaced by an extended income concept which takes into account the three 'I's: indirect taxes, imputed rent, and in-kind benefits. Second, it assesses how sensitive the distributional effects of each tax-benefit instrument are to the choice of income concept. The analysis covers three European countries (Belgium, Greece and the UK) characterised by substantially different tax-benefit systems, giving a stronger base for generalising the results. The main findings are that the overall redistributive effect of the tax-benefit systems depends heavily on the income concept considered and the differences across countries are smaller when considering the extended income distribution. Moreover, the common use of a narrower income concept, such as the disposable income, can lead to the overestimation of the redistributive effect of the cash tax-benefit instruments (in relative terms), the extent of this varying across countries, due to the size and distribution of three 'I's and the adoption of the needs-adjusted equivalence scale.
Imputed rent
indirect taxes
in-kind benefits
household income
Document Type: 
Working Paper

Files in This Item:
277.71 kB

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