Two Approaches to Quantify the Concept of Equitable Income Distribution
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Also published in: Jan Tinbergen, Production, Income and Welfare: the search for an optimal social order, Wheatsheaf Books, Brighton, 1985, pp. 101-110
Three alternative definitions of equity are presented, which coincide under special conditions only. The author prefers the definition that equity means equality of welfare. This presupposes measurability of welfare (or utility). Two methods of measurement are discussed, called revealed or indirect and direct measurement. Concrete applications of both are shown, together with their shortcomings. In both cases equitable distribution is found to be less unequal than actual distribution in the Netherlands. Further research needed, on additional relevant determinants of utility and on learnability of some capabilities are formulated.