Vertical Equity and Horizontal Inequity
Author | : Nanak Kakwani |
Publisher | : |
Total Pages | : 28 |
Release | : 1995 |
Genre | : Income distribution |
ISBN | : |
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Author | : Nanak Kakwani |
Publisher | : |
Total Pages | : 28 |
Release | : 1995 |
Genre | : Income distribution |
ISBN | : |
Author | : Nanak Kakwani |
Publisher | : |
Total Pages | : |
Release | : 1995 |
Genre | : Economics |
ISBN | : |
Author | : Robert D. Plotnick |
Publisher | : |
Total Pages | : 52 |
Release | : 1984 |
Genre | : Households |
ISBN | : |
Author | : Kevin A. Hassett |
Publisher | : |
Total Pages | : 29 |
Release | : 1999 |
Genre | : Income distribution |
ISBN | : |
In this paper, we propose a new measure of horizontal equity that overcomes many of the shortcomings of previous proposed measures. Our starting point is the observation that a well-behaved social welfare function need not evaluate global' (vertical equity) differences in after-tax income using the same weights it applies to local' (horizontal equity) differences, even though this constraint has been applied in the past. Following work on the structure of individual preferences, we show that a social welfare function can imply different preferences toward horizontal and vertical equity. Adopting the general approach to the measurement of inequality developed by Atkinson (1970), we use such a social welfare function to derive measures of inequality that are decomposable into components naturally interpreted as indices of horizontal and vertical equity. In particular, the former index measures deviations from the fundamental principle that equals be treated equally. Finally, we apply our new measure to two tax-return data sets, evaluating the degree to which the horizontal equity of the US personal income tax has changed over time, and how horizontal equity would be altered by one version of recent proposals to do away with the so-called marriage penalty.'
Author | : Mr.Peter J. Lambert |
Publisher | : International Monetary Fund |
Total Pages | : 34 |
Release | : 1995-12-01 |
Genre | : Business & Economics |
ISBN | : 1451855656 |
This paper makes a new attack on the old problem of measuring horizontal inequity in the income tax. Local measures of inequality of posttax income among pretax equals are proposed, which reflect alternative value judgments about the nature and magnitude of an inequity. These measures are aggregated into global indices. The welfare gain from eliminating horizontal inequity revenue-neutrally, and the revenue gain from eliminating it welfare-neutrally, in each case preserving the vertical performance of the tax, are captured by these indices. Difficulties of implementation arising from the “identification problem” are discussed. A variation in the methodology validates banding the income data to create “close equals” groups. Simulations show that the banding procedure works well. A range of potentially fruitful applications is discussed.
Author | : L. Vallejo-Torres |
Publisher | : |
Total Pages | : |
Release | : 2012 |
Genre | : |
ISBN | : |
In this thesis we examine the overlooked issue of vertical equity in health care delivery. This principle requires that individuals with unequal needs receive appropriately unequal treatment. Most analyses of equity in health care delivery focus only on horizontal equity, i.e. the principle of equal treatment for equal needs. Therefore, the aim of this thesis is to assess and refine the techniques to investigate vertical inequity, and to offer evidence about vertical equity in the English health care system. The extent of inequalities in health is first investigated. We find persistent inequalities in health in England. We then illustrate the methods widely used in the literature to explore horizontal inequity in health care and highlight a major limitation; these studies ignore the possibility that the estimated differential treatment received by individuals with different needs is inappropriate. In order to identify the methods used to date to measure vertical equity we review the empirical literature. The most comprehensive techniques identified focused on the socioeconomic dimension of vertical inequity. We illustrate these techniques and suggest an extension to this measure that takes into account the full distribution of needs in a population. We apply our suggested methods to measure inequity in individual level and in area level health care provision in England. The optimal variation of health care with variation in needs is estimated based on subgroups less likely to be affected by unmet needs. The findings of this thesis indicate that there is vertical inequity in detriment to socioeconomic deprived groups and, to a larger extent, in detriment to those with larger needs. We show that including vertical inequity aspects may lead us to draw different conclusions about the nature and extent of inequity. Therefore, conclusions about inequities in health care are extensively being made on the basis of incomplete information.
Author | : Mervyn A. King |
Publisher | : |
Total Pages | : |
Release | : 1983 |
Genre | : |
ISBN | : |
An index of Inequality is constructed which decomposes into two components, corresponding to vertical and "horizontal" equity respectively. Horizontal equity Is defined in terms of changes in the ordering of a distribution. The proposed index is a function to two inequality aversion parameters. One empirical application is for comparison of a pre-tax distribution with a post-tax distribution, and an example of this is given for the distribution of incomes in the UK in 1977. There is a trade-off between "horizontal"and vertical equity, and for particular combinations of the inequality aversion parameters the original distribution will be preferred to the final distribution. The paper concludes with an application of the proposed index to a model of optimal taxation
Author | : Melissa Holly Mahoney |
Publisher | : |
Total Pages | : 0 |
Release | : 2013 |
Genre | : |
ISBN | : |
This article explores how inequities in public K-12 school spending impact the distribution of economic well-being across American households with public school students in 1989 and 2000. Adapting concepts from the public finance literature, I explore the impact of school spending on the vertical and horizontal equity and its impact relative to other types of public spending on social programs and taxation. Conventionally, vertical equity refers to the size of the income gaps between households. Horizontal equity refers to the ranking of households along the income distribution with any change in ranks producing horizontal inequity. My main findings show that school spending, when converted into a component of income, served to reduce extended-income inequality through improvements in vertical equity without the discriminatory implications of exacerbating horizontal inequity across households. Additionally, this impact was at least as large as that of spending on other social programs. This finding bolsters standard arguments for equity and progressivity of school finance across students.
Author | : Peter J. Lambert |
Publisher | : |
Total Pages | : 0 |
Release | : 1998 |
Genre | : |
ISBN | : |
Inequality of post-tax income among pre-tax equals is evaluated and aggregated to form a global index of horizontal inequity in the income tax. The vertical action of the tax is captured by its inequality effect on average between groups of pre-tax equals. Putting the two together, horizontal inequity measures loss of vertical performance. The identification problem, which has previously been thought insuperable, is addressed by a procedure validating the banding of income units into "close equals" groups. The horizontal and vertical effects of a major Spanish income tax reform are evaluated. Lines for future investigation are suggested.
Author | : Roberto Galbiati |
Publisher | : |
Total Pages | : 14 |
Release | : 2005 |
Genre | : |
ISBN | : |
The principle of Horizontal Equity (HE), claiming that the amp;‘equals in all relevant senses should be treated equallyamp;’, is considered as a basic principle to be followed in order to design and evaluate a redistributive policy. However, despite several indices of Horizontal Inequity (HI) having been proposed in the literature, the theoretical debate has not clarified yet amp;‘what is horizontal equityamp;’. In this paper we aim at making clear what is the meaning of the principle of HE and its normative content. In particular we establish the true statuses of the two fundaments of the principle of HE, defining what is meant by amp;‘equalsamp;’ and then treating these amp;‘equalsamp;’ amp;‘equallyamp;’. The former is known as the identification problem, and the latter has typically been regarded as the normative claim of horizontal equity, but perhaps surprisingly the latter may be all but empty. Our analysis brings forth a new and more appropriate definition of the principle of HE. Some implications concerning the normative meaning of an HI index and the relationship between Horizontal and Vertical Equity are derived.