Chapter 7-Income Redistribution: Conceptual Issues Public economics
1 Chapter 7 – Income Redistribution: Conceptual Issues Public Economics
Introduction Will provide framework for thinking about the normative and positive aspects of government income redistribution policy
2 Introduction • Will provide framework for thinking about the normative and positive aspects of government income redistribution policy
Introduction Some questions whether economists should be concerned with distributiona Issues Value judgments embodied in the"right income distribution No scientific basis for the right distribution
3 Introduction • Some questions whether economists should be concerned with distributional issues. – Value judgments embodied in the “right” income distribution. – No scientific basis for the “right” distribution
Introduction Focus on efficiency alone has problems That focus, too is a value judgment Multiple equilbria Decision makers do care about the income distribution economic analysis ineffective if it doesnt consider this policy-maker constraint
4 Introduction • Focus on efficiency alone has problems. – That focus, too, is a value judgment. – Multiple equilbria. – Decision makers do care about the income distribution; economic analysis ineffective if it doesn’t consider this policy-maker constraint
Distribution of Income Can analyze household income and see how equally or unequally the"pie is distributed Table 7.1 shows the percentage of money income among households for more than 30 years
5 Distribution of Income • Can analyze household income, and see how equally or unequally the “pie” is distributed. • Table 7.1 shows the percentage of money income among households for more than 30 years