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Should income inequality be praised? Multiple public goods provision, income distribution, and social welfare
| Title: | Should income inequality be praised? Multiple public goods provision, income distribution, and social welfare |
| Authors: | Itaya, Jun-ichi Browse this author →KAKEN DB | | Mizushima, Atsue Browse this author →KAKEN DB |
| Keywords: | Public goods | | Inequality | | Social welfare | | Voluntary provision | | Income distribution |
| Issue Date: | 26-Jan-2016 |
| Publisher: | Graduate School of Economics and Business Administration, Hokkaido University |
| Journal Title: | Discussion Paper, Series A |
| Volume: | 298 |
| Start Page: | 1 |
| End Page: | 37 |
| Abstract: | We investigate how income inequality affects social welfare in a model of voluntary contributions to multiple pure public goods. Itaya, de Meza, and Myles (1997) show that the maximization of social welfare precludes income equality in a single pure public good model. In contrast, we show that the result of Itaya et al. may not be valid in a case of multiple voluntarily supplied public goods; specifically, we show that not only an income inequality-raising redistribution policy but also an income-equalizing one may raise social welfare. We also show that if altruistically motivated voluntary transfers are allowed, an inequality-raising redistribution policy is no longer effective and leaves social welfare unchanged. |
| Type: | bulletin (article) |
| URI: | http://hdl.handle.net/2115/60614 |
| Appears in Collections: | Discussion paper > Series A
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