A multi-factor inequality approach to a transfer scheme: the case of Common Agricultural Policy

Palestini, Arsen ; Pignataro, Giuseppe (2013) A multi-factor inequality approach to a transfer scheme: the case of Common Agricultural Policy. Bologna: Dipartimento di Scienze economiche DSE, p. 23. DOI 10.6092/unibo/amsacta/3717. In: Quaderni - Working Paper DSE (891). ISSN 2282-6483.
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Abstract

The purpose of this paper is to propose theoretical foundations on the impact of transfer scheme, e.g. Community Agricultural Policy, on income inequality within European Countries. First, we show that ex-post inequality (in the after-transfer distribution) may increase if either initial aggregate income or the amount of fiscal contributions are sufficiently high. Second according to welfare ordering, we characterize a multi-factor decomposition of the Atkinson index to gauge the impact of each income source on the inequality profile. Third, we introduce a methodology to construct a cooperative game played by different income factors (as net incomes and/or incoming transfers) explicitly measuring the cost of inequality across the population in terms of welfare loss. We finally rely on Banzhaf and Shapley values to determine the marginal contributions of each factor to overall inequality.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Palestini, Arsen
Pignataro, Giuseppe
Keywords
Atkinson index, income sources, Shapley, transfer scheme, cooperative game, CAP
Subjects
ISSN
2282-6483
DOI
Deposit date
02 Jul 2013 13:07
Last modified
24 Feb 2016 09:02
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