A non-parametric decomposition of redistribution into vertical and horizontal components
- Perrote Coste, Irene
- Rodríguez Hernández, Juan Gabriel
- Salas del Mármol, Rafael
ISSN: 1578-0252
Año de publicación: 2001
Número: 10
Páginas: 1-22
Tipo: Artículo
Otras publicaciones en: Papeles de trabajo del Instituto de Estudios Fiscales. Serie economía
Resumen
We use non-parametric methods to propose horizontal inequity (HI) measures that satisfy certain normative and statistical properties. The HI measures tackle the problem of arbitrary definition of similar individuals and satisfy the horizontal transfer principle. HI is measured by any index consistent with the distance between the estimated and actual post-tax income Lorenz curves. This incorporates an ordinal view of HI. The total effect of a tax system can be decomposed into welfare gain due to income redistribution free of HI and welfare loss due to HI. Other indices in the literature can be seen as particular cases.