American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Preferences over Equality in the Presence of Costly Income Sorting
American Economic Journal: Microeconomics
vol. 7,
no. 2, May 2015
(pp. 308–37)
Abstract
We analyze preferences over redistribution in societies with costly (positive) sorting according to income. We identify a new motivation for redistribution, where individuals support taxation in order to reduce the incentives to sort. We characterize a simple condition over income distributions which implies that even relatively rich voters—with income above the mean—will prefer full equality (and thus no sorting) to societies with costly sorting. We show that the condition is satisfied for relatively equal income distributions. We also relate the condition to several statistical properties which are satisfied by a large family of distribution functions. (JEL D31, D63, H23)Citation
Levy, Gilat, and Ronny Razin. 2015. "Preferences over Equality in the Presence of Costly Income Sorting." American Economic Journal: Microeconomics, 7 (2): 308–37. DOI: 10.1257/mic.20130031Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H23 Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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