The Identification of the Bandwidth for the Potential Redistribution Index Evaluation

• Autorzy: Edyta Mazurek
• Języki publikacji: EN

Abstrakty

EN

A decomposition of actual redistributive effect was proposed by Aronson Johnson and Lambert in 1992, in order to evaluate the potential redistributive effect. However this decomposition is not univocally determined, but as it can be calculated after having gathered incomes into groups of "close" equals, de facto it depends on the bandwidth chosen to split the income parade into contiguous income groups; this means that the bandwidth has to be chosen according to proper criteria: Van de Ven, Creedy, Lambert (VCL criterion) propose to choose the bandwidths where potential redistributive indexes are maxima. However the literature proposes more than one index to measure the potential redistribution of a tax system and the maxima associated to each of them do not necessarily coincide and, moreover, they do not generally show a regular sequence of values leading to the global maxima. The main aim of this paper is to contribute to the problem of defining a proper bandwidth which can split the income parade into close equal groups: VCL criterion is considered together with a minimum criterion recently proposed by Vernizzi and Pellegino (VP criterion). Empirical evidence is obtained by a data set of incomes and taxes collected by two Lower-Silesian revenue offices. The analyses were conducted by the author's own programmes written in the "R" language.(original abstract)

Słowa kluczowe

EN

Redistribution of income; Income division; Household income

PL

Redystrybucja dochodów; Podział dochodów; Dochody gospodarstw domowych

• Czasopismo: Argumenta Oeconomica
• Rocznik: 2012
• Numer: nr 2 (29)
• Strony: 53--75

Twórcy

autor

Edyta Mazurek

• Wrocław University of Economics, Poland

Bibliografia

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• Aronson, J. P., Lambert, P. J., Decomposing the Gini Coefficient to Reveal the Vertical, Horizontal and Reranking Effects of Income Taxation, "National Tax Journal", 47, pp. 273-294, 1994.
• Aronson, J. P., Johnson, P. J., Lambert, P. J., Redistributive Effect and Unequal Income Tax Treatment, "The Economical Journal", 104, pp. 262-270, 1994.
• Kakwani, N. C., On the Measurement of Tax Progressivity and Redistributive Effect of Taxes with Applications to Horizontal and Vertical Equity, "Advances in Econometrics", 3, pp. 149-168, 1984.
• Kim, K., Lambert, P. J., Redistributive Effect of U.S. Taxes and Public Transfers, 1994-2004, "Public Finance Review", 20, No. 10, pp.1-24, 2008.
• Lambert, P. J., The Distribution and Redistribution of Income. A Mathematical Analysis. Manchester Univ. Press 1993.
• R Development Core Team, R: A language and environment for statistical computing. R, Foundation for Statistical Computing, Vienna, Austria. ISBN 3-900051-07-0, URL http://www.Rproject.org 2008.
• Urban, I., Lambert, P. J., Redistribution, Horizontal Inequity and Reranking: How to Measure Them Properly, "Public Finance Review", 36, pp.563-587, 2008.
• Van de Ven, J., Creedy, J., Lambert, P. J., Close Equals and Calculation of the Vertical, Horizontal and Reranking Effects of Taxation, "Oxford Bulletion of Economics and Statistics", 63, 3 , pp.381-394, 2001.
• Vernizzi, A., Pellegrino, S., On Determining "Close Equals Groups" in Decomposing Redistributive and Reranking Effects, SIEP, WP 2007-602.