prof. dr hab. Stanisław Kot | Gdańsk University of Technology

Research background: In the actual sizable populations of households, the standard microeconomic concept of equivalence scales is intractable since its necessary condition of equality of household welfare levels is unlikely to be fulfilled. Purpose of the article: This paper aims to develop a concept of an equivalence scale, which can be suitable for continuous distributions of expenditures in the population. Methods: Using household...

The aim of this study is twofold. First, we propose new methods of estimating equivalence scales. We call these methods nonstandard to distinguish them from the standard procedures based on the microeconomic theory of demand systems. Searching for the ‘as simple as possible’ method has been a leitmotiv of this study. Second, we estimate various forms of equivalence scales for 28 European Union (EU) member countries and four non-member...

In this paper, we estimate aversion to rank inequality (ATRI) underlying selected Italian income inequality indices, I, notably the Pietra index, the Bonferroni index and the “new” Zenga index. We measure ATRI by the parameter v of the generalised Gini index G(v). ATRI is distinct from aversion to income inequality, as measured by parameter ε of Atkinson’s index A(ε). We propose eliciting v from the equation I = GE(v). As, in general,...

Research background: In the distributive analysis, the constant relative inequality aversion utility function is a standard tool for ethical judgements of income distributions. The sole parameter ε of this function expresses a society’s aversion to inequality. However, the profession has not committed to the range of ε. When assessing inequality and other welfare characteristics, analysts assume an arbitrary level of ε, common...

Research background: In applied welfare economics, the constant relative inequality aversion function is routinely used as the model of a social decisionmaker’s or a society’s preferences over income distributions. This function is entirely determined by the parameter, ε, of inequality aversion. However, there is no authoritative answer to the question of what the range of ε an analyst should select for empirical work. Purpose...