Being up Front about Income Inequality

35 Pages Posted: 13 Jan 2020 Last revised: 15 Oct 2020

See all articles by Brian Hill

Brian Hill

HEC Paris - Economics & Decision Sciences; CNRS

Date Written: January 7, 2020

Abstract

This paper proposes universal provision of information about the income inequality involved in the creation of a good as a means of moderating income inequality. Existing evidence suggests that a section of the population would be willing to pay more for goods whose production involves less excessive income inequality. We show, on a simple model, that supplying inequality information to such a population under competitive markets will in general lead to a reduction in global income inequality. The effect will be stronger the more inequality averse the population. Moreover, the outcome will be socially efficient. Possibilities for (de-centralized) implementation are also discussed.

Keywords: Income inequality, information provision, externalities, inequality aversion

JEL Classification: D63, D83, D3, J3

Suggested Citation

Hill, Brian, Being up Front about Income Inequality (January 7, 2020). HEC Paris Research Paper, No. ECO/SCD-2020-1362, Available at SSRN: https://ssrn.com/abstract=3515349 or http://dx.doi.org/10.2139/ssrn.3515349

Brian Hill (Contact Author)

HEC Paris - Economics & Decision Sciences ( email )

Paris
France

CNRS ( email )

3, rue Michel-Ange
Paris, 75794
France

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