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DARP Paper
Inequality and Envy
Frank A Cowell and Udo Ebert
December 2006
Paper No' DARP 088:
Full Paper (pdf)

JEL Classification: D63

Tags: inequality; envy; transfer principle.

Using a simple axiomatic structure we characterise two classes of inequality indices - absolute and relative - that take into account “envy” in the income distribution. The concept of envy incorporated here concerns the distance of each person’s income from his or her immediately richer neighbour. This is shown to be similar to justice concepts based on income relativities.