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A NOTE ON WELFARE EFFECT AND DESIRABILITY OF INEQUALITY INDUCING TRANSFERS ♣
Author(s) -
Mukherjee Vivekananda,
Sanyal Tilak
Publication year - 2011
Publication title -
annals of public and cooperative economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.526
H-Index - 37
eISSN - 1467-8292
pISSN - 1370-4788
DOI - 10.1111/j.1467-8292.2011.00440.x
Subject(s) - inequality , welfare , preference , economics , class (philosophy) , public economics , revealed preference , microeconomics , demographic economics , mathematics , market economy , computer science , mathematical analysis , artificial intelligence
ABSTRACT: Using a general description of the preference patterns of individuals the theoretical framework developed in the paper characterizes the welfare effect of inequality‐inducing transfers and the attitude of the poor to such transfers in the case of private provision of public good. Depending on the preference of the individuals, it may be true or not that if the poor do not contribute towards the public good class antagonism does not hold. Our results are exceptions to those existing in the literature. On the one hand we explain why we observe very few instances of inequality‐inducing transfers adopted at the policy level around the world; on the other hand, we also show why there are cases where the non‐contributing poor tolerate increasing income inequality.