Measuring Unfair (in) Equality

36 Pages Posted: 11 Feb 2010

See all articles by Ingvild Almås

Ingvild Almås

Stockholm University - Institute for International Economic Studies (IIES)

Alexander W. Cappelen

Norwegian School of Economics (NHH) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Jo Thori Lind

University of Oslo - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Erik Sorensen

Norwegian School of Economics (NHH) - Department of Economics

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics

Date Written: April 30, 2008

Abstract

The standard approach to inequality measurement regards all inequalities as being unfair. However, most people do not share this view, and believe that some inequalities are fair. This paper shows one way of generalizing the standard approach to take account of the distinction between fair and unfair inequalities. Within this framework, we introduce the unfairness Lorenz curve and the unfairness Gini, which are generalizations of the standard versions of the Lorenz curve and the Gini. With this more general framework in place, we study the implications of responsibility-sensitive theories of justice for the evaluation of the income distribution in Norway from 1986 to 2005. We nd that the income distribution has become unfairer in Norway, even though the standard Gini has decreased over the same period. We show that this conclusion holds for di erent views on what individuals should be held responsible for, and for alternative specifications of the responsibility-sensitive fairness principle.

Keywords: Income inequality, Fairness

JEL Classification: D31, D63, J31

Suggested Citation

Almås, Ingvild and Cappelen, Alexander W. and Lind, Jo Thori and Sorensen, Erik and Tungodden, Bertil, Measuring Unfair (in) Equality (April 30, 2008). NHH Dept. of Economics Discussion Paper No. 32/2007, Available at SSRN: https://ssrn.com/abstract=1550653 or http://dx.doi.org/10.2139/ssrn.1550653

Ingvild Almås (Contact Author)

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

Alexander W. Cappelen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Jo Thori Lind

University of Oslo - Department of Economics ( email )

P.O. Box 1095 Blindern
N-0317 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Erik Sorensen

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
Bergen, NO-5045
Norway

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

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