Preferences over equality in the presence of costly income sorting

Levy, Gilat and Razin, Ronny (2015) Preferences over equality in the presence of costly income sorting. American Economic Journal: Microeconomics, 7 (2). pp. 308-337. ISSN 1945-7669

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Abstract

We analyze preferences over redistribution in societies with costly (positive) sorting according to income. We identify a new motivation for redistribution, where individuals support taxation in order to reduce the incentives to sort. We characterize a simple condition over income distributions which implies that even relatively rich voters—with income above the mean—will prefer full equality (and thus no sorting) to societies with costly sorting. We show that the condition is satisfied for relatively equal income distributions. We also relate the condition to several statistical properties which are satisfied by a large family of distribution functions.

Item Type:	Article
Official URL:	https://www.aeaweb.org/journals/mic
Additional Information:	© 2015 American Economic Association
Library of Congress subject classification:	H Social Sciences > HB Economic Theory
Sets:	Departments > Economics
Date Deposited:	18 Aug 2014 13:44
URL:	http://eprints.lse.ac.uk/59053/

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