Lambert, Peter J.
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Item Open Access A fourth ‘I’ of poverty ?(University of Oregon, Dept of Economics, 2007-02-02) Esposito, Lucio; Lambert, Peter J.Current poverty measurement methodology does not allow a definitive analysis of changes in distribution, through time or between countries, which involve changes in the number or proportion of poor people. By reopening some of the discussion which has taken place around the incidence, intensity and inequality aspects of poverty, and by revisiting the continuity and transfer axioms, we show that the Bourguignon and Fields poverty index allows considerable ethical flexibility when its parameters are used to full advantage. Significantly, a fourth dimension of poverty, the injustice of it, corresponding closely with Rawls’s concern for the least advantaged, can also be admitted into the picture once the poverty aversion parameter in the Bourguignon and Fields index is fully understood and used appropriately. A novel application leads to a perspective upon the entire class of relative poverty indices which has not been seen before, and also generates both potentially interesting new poverty indices and wider scope for cogent measurement.Item Open Access Redistributive Effect of U.S. Taxes and Public Transfers, 1994-2004(University of Oregon, Dept of Economics, 2007-02-06) Lambert, Peter J.; Kim, Kinam, 1970-In this study we derive measures of the redistributive effect of taxes and welfare expenditures for the U.S. using CPS data for the years 1994, 1999 and 2004. We find that whilst income inequality increased, the redistributive effect of taxes and public transfers together reduced market income inequality by approximately 30 percent. In 2004, 88 percent of the net redistributive effect resulted from public transfers and 12 percent from taxes. The total redistributive effect would have improved by 35 percent in 2004 if, all else equal, horizontal inequities in taxes and public transfers could have been eliminated.Item Open Access Measuring the Pro-Poorness of Income Growth Within an Elasticity Framework(University of Oregon, Dept of Economics, 2006-09-22) Essama-Nssah, B. (Boniface), 1949-; Lambert, Peter J.Poverty reduction has become a fundamental objective of development, and therefore a metric for assessing the effectiveness of various interventions. Economic growth can be a powerful instrument of income poverty reduction. This creates a need for meaningful ways of assessing the poverty impact of growth. This paper follows the elasticity approach to propose a measure of pro-poorness defined as a weighted average of the deviation of a growth pattern from the benchmark case. The measure can help assess pro-poorness both in terms of aggregate poverty measures which are members of the additively separable class, and at percentiles. It also lends itself to a decomposition procedure, whereby the overall pattern of income growth can be unbundled, and the contributions of income components to overall pro-poorness identified. An application to data for Indonesia in the 1990s reveals that the amount of poverty reduction achieved over that period remains far below what would have been achieved under distributional neutrality. This conclusion is robust to the choice of a poverty measure among members of the additively separable class, and can be tracked back to changes in expenditure components.Item Open Access Taking care of your own: Ethnic and religious heterogeneity and income inequality(University of Oregon, Dept of Economics, 2006) Dincer, Oguzhan; Lambert, Peter J.Using recently developed indices of fractionalization and polarization, we analyze the direct and indirect effects of ethnic and religious heterogeneity on income inequality and on welfare programs across US states. We find strong evidence (1) that there is a positive relationship between ethnic and religious polarization and income inequality and an inverse-U shaped relationship between ethnic and religious fractionalization and income inequality; and (2) that there is a negative relationship between ethnic and religious polarization and monthly welfare payments under the AFDC/TANF scheme, and a U-shaped relationship between ethnic and religious fractionalization and the AFDC/TANF payments.Item Open Access The Equal Sacrifice Principle Revisited(University of Oregon, Dept of Economics, 2006-06-01) Lambert, Peter J.; Naughton, Helen T. (Helen Tammela), 1976-What does an equal sacrifice tax look like in the case of a rank-dependent social welfare function? One's tax liability evidently becomes a function of one's income and one's position in the distribution in such a case, but not much else appears to be known. (Menahem Yaari touched upon the issue in his paper "A controversial proposal concerning inequality measurement," Journal of Economic Theory 1988, but focused only on a poll tax.) In this paper, we determine the properties of the equal sacrifice tax for a wide class of rank-dependent social welfare functions, and integrate the theory with that already available for the class of utilitarian social welfare functions. In an additional step, we analyze the equal sacrifice tax for a class of mixed utilitarian and rank-dependent social welfare functions, and finally we review what this synthesis has achieved.Item Open Access Base independence in the analysis of tax policy effects: with an application to Norway 1992–2004(University of Oregon, Dept of Economics, 2005-10-27) Lambert, Peter J.; Thoresen, Thor OlavThe analysis contrasts results of two recently expounded micro-level data approaches to derive robust intertemporal characterizations of redistributional effects of income tax schedules; the fixed-income procedure of Kasten, Sammartino and Toder (1994) and the transplant-and-compare method of Dardanoni and Lambert (2002). Our study is normative in that the Blackorby and Donaldson (1984) index of tax progressivity is employed. This enables contributions from vertical redistribution and horizontal inequity also to be assessed, using for the latter one classical measure and one no reranking measure. When the competing methodologies are applied to Norwegian data for 1992–2004, their respective strengths and weaknesses are revealed. The transplant-and-compare procedure is found to have a number of advantages.Item Open Access Redistribution, horizontal inequity and reranking: how to measure them properly(University of Oregon, Dept of Economics, 2005-07-01) Urban, Ivica; Lambert, Peter J.The decomposition of the redistributive effect of an income tax into vertical, horizontal and reranking contributions according to the model of Aronson, Johnson and Lambert (1994), henceforth AJL, is revisited. When close equals groups are used, rather than the exact equals groups upon which the model is predicated, problems arise. A new measurement system is proposed, in which three distinct forms of reranking are disentangled and the vertical and horizontal contributions are redefined. Other approaches to measuring equity in tax systems are set in context. Findings are applied to Croatian data, and recommendations for users of the AJL methodology are given.Item Open Access On Bounded Dominance Criteria(University of Oregon, Dept of Economics, 2005-04-26) Ooghe, Erwin; Lambert, Peter J.A well-known criterion to make heterogeneous welfare comparisons is Atkinson and Bourguignon’s (1987) sequential generalized Lorenz dominance (SGLD) criterion. Recently, Fleurbaey, Hagneré and Trannoy (2003) convincingly argue that it contains unreasonable household utility profiles and suggest to put (lower and upper) bounds on the needs of the different household types. First, we generalize Atkinson and Bourguignon’s SGLD criterion, by introducing lower bounds in the household utility profiles. Second, we propose a new SGLD criterion by introducing upper bounds in a similar way. Third, we impose lower and upper bounds simultaneously and obtain a criterion which is intermediate between Ebert’s (1999) equivalence scale weighted approach and Atkinson and Bourguignon’s (1987) SGLD approach.Item Open Access The Gini Coefficient Reveals More(University of Oregon, Dept of Economics, 2004-12-02) Lambert, Peter J.; Decoster, AndreWe revisit the well-known decomposition of the Gini coefficient into between-groups, within-groups and overlap terms in the context of two groups in which the incomes in one group may be scaled and that group’s population weight modified. In this more general setting than usual, we focus on the properties of the overlap term, proving inter alia that overlap unambiguously reduces as a result of a within-group progressive transfer, and is increased by scaling up the incomes in the group with the lower mean, reaching a maximum when the two means become the same. In the case of a socially heterogeneous population and equivalized incomes, the effect on the Gini overlap of changing the income unit is determined, along with that of adjusting the equivalence scale deflator in case the income unit is the equivalent adult (such adjustment simultaneously changing the weighting of income units). Relationships of the findings to existing literature are thoroughly explored.Item Open Access Sequential procedures for poverty gap dominance(University of Oregon, Dept of Economics, 2005-01-01) Zoli, Claudio; Lambert, Peter J.Poverty evaluations differ from welfare evaluations in one significant aspect, the existence of a threshold or reference point, the poverty line. It is therefore possible to build up normative evaluation models in which comparisons are made taking distances from this reference point and not only from the origin to be ethically relevant. This is the case in our model of poverty comparisons over heterogeneous populations, which focuses upon poverty gaps and not incomes. When poverty lines differ for the different groups in the population we show that choosing poverty gaps instead of incomes as the relevant indicator brings in normatively appealing classes of poverty indices not previously accommodated. For these indices poverty comparisons over heterogeneous populations are implemented through sequential poverty gap curves (or poverty gap distributions) dominance. These novel conditions are logically related to those suggested in Atkinson and Bourguignon (1987) for welfare comparisons, and can also be grounded firmly upon those of Bourguignon (1989). The proportion of poor individuals in the society or their average poverty gap play a role in our comparisons that was neglected in the existing poverty dominance criteria for heterogeneous populations. Various intermediate poverty dominance conditions and a generalization of the poverty gap approach are also investigated.Item Open Access The effect on inequality of changing one or two incomes(University of Oregon, Dept. of Economics, 2003-06-10) Lambert, Peter J.; Lanza, GiuseppeWe examine the effect on inequality of increasing one income, and show that for two wide classes of indices a benchmark income level or position exists, dividing upper from lower incomes, such that if a lower income is raised, inequality falls, and if an upper income is raised, inequality rises. We provide a condition on the inequality orderings implicit in two inequality indices under which the one has a lower benchmark than the other for all unequal income distributions. We go on to examine the effect on the same indices of simultaneously increasing one income and decreasing another higher up the distribution, deriving results which quantify the extent of the "bucket leak" which can be tolerated without negating the beneficial inequality effect of the transfer. Our results have implications for the inequality impacts of different income growth patterns, and of redistributive programmes (leaky or not), which are briefly discussed.