Equity (economics)

Equity (economics)

Equity is the concept or idea of fairness in economics, particularly as to taxation or welfare economics.

In welfare economics, equity may be distinguished from economic efficiency in overall evaluation of social welfare. Although 'equity' has broader uses, it may be posed as a counterpart to economic inequality in yielding a "good" distribution of welfare. It has been studied in experimental economics as inequity aversion.

In public finance "horizontal equity" is the idea that people with a similar ability to pay taxes should pay the same or similar amounts. It is related to the concept of "tax neutrality" or the idea that the tax system should not discriminate between similar things or people, or unduly distort behavior. [Musgrave (1987), pp. 1057-58.] .

"Vertical equity" is the idea that people with a greater ability to pay taxes should pay more. If they pay more strictly in proportion to their income, this is known as a "proportional tax"; if they pay an increasing proportion, this is termed a "progressive tax", more associated with redistribution. [Musgrave (1959), p. 20.]

In a Health Care Context

Horizontal equity means treating the same those who are the same in a relevant respect (such as having the same 'need'). Vertical equity means treating differently those who are different in relevant respects (such as having different 'need'), (Culyer, 1995).

Health studies of equity seek to identify whether particular social groups receive systematically different levels of care to other groups.



* Anthony B. Atkinson and Joseph E. Stiglitz (1980). "Lectures in Public Economics", McGraw-Hill Economics Handbook Series
* Xavier Calsamiglia and Alan Kirman (1993). "A Unique Informationally Efficient and Decentralized Mechanism with Fair Outcomes," "Econometrica", 61(5) , p [http://links.jstor.org/sici?sici=0012-9682%28199309%2961%3A5%3C1147%3AAUIEAD%3E2.0.CO%3B2-7&size=LARGE&origin=JSTOR-enlargePage p. 1147] -1172.
* A.J. Culyer (1995). "Need — the Idea Won’t So — but We Still Need It" "Social Science and Medicine", 40, pp. 727–730.
*Jean-Yves Duclos (2008). "horizontal and vertical equity," "The New Palgrave Dictionary of Economics," 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_H000177&q=equity&topicid=&result_number=1 Abstract.]
* Allan M. Feldman (1987). "equity," "The ", v. 2, pp. 182-84.
* Peter J. Hammond (1987). "altruism," "The New Palgrave: A Dictionary of Economics", v. 1, pp. 85-87.
* Julian Le Grand {1991). "Equity and Choice: An Essay in Economics and Applied Philosophy".
* Richard A. Musgrave (1959). "The Theory of Public Finance: A Study in Political Economy".
* _____ (1987). "public finance," "The ", v. 3, pp. 1055-60.
* Richard A. Musgrave and Peggy B. Musgrave (1973). "Public Finance in Theory and Practice"
* Joseph E. Stiglitz (2000). "Economics of the Public Sector", 3rd ed. Norton.
* William Thomson (2008). "fair allocation," "The New Palgrave Dictionary of Economics," 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_F000303&q=equity&topicid=&result_number=17 Abstract.]
* World Bank. "World Development Report 2006: Equity and Development". [http://econ.worldbank.org/external/default/main?pagePK=64165259&theSitePK=469372&piPK=64165421&menuPK=64166093&entityID=000112742_20050920110826 Summary with ch. links.]
* H. Peyton Young (1994). "Equity: In Theory and Practice". Princeton NJ: Princeton University Press. [http://www.econ.jhu.edu/People/Young/scans/Equity.pdf Contents and introduction.]

ee also

* Economic inequality
* Justice (economics)

Wikimedia Foundation. 2010.

Look at other dictionaries:

  • Equity — can refer to:General* Equity (law), a branch of jurisprudence in common law jurisdictions * In many political and legal systems, a concept encompassing ideals of justice (fairness) and/or equality * Equality, the philosophical ideal of valuing… …   Wikipedia

  • Economics of the arts and literature — or, for ease of reference below, cultural economics, is a branch of economics that studies the economics of creation, distribution, and the consumption of works of art and literature. For a long time the arts were confined to visual and… …   Wikipedia

  • equity capital — (Economics) total financial means of a company (such as paid stocks, profits, capital funds, etc.) …   English contemporary dictionary

  • Economics of global warming — This article describes the economics of global warming and climate change. Contents 1 Definitions 2 Climate change science 3 Scenarios 4 Trends and projections …   Wikipedia

  • Equity premium puzzle — The equity premium puzzle is a term coined by economists Rajnish Mehra and Edward C. Prescott. It is based on the observation that in order to reconcile the much higher return on equity stock compared to government bonds in the United States,… …   Wikipedia

  • Equity (finance) — For equity securities, see Stock. Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Cash flow management  …   Wikipedia

  • Equity co-investment — An equity co investment (or co investment) is a minority investment, made directly into an operating company, alongside a financial sponsor or other private equity investor, in a leveraged buyout, recapitalization or growth capital transaction.… …   Wikipedia

  • Economics of new nuclear power plants — The economics of new nuclear power plants is a controversial subject, since there are diverging views on this topic, and multi billion dollar investments ride on the choice of an energy source. Nuclear power plants typically have high capital… …   Wikipedia

  • Economics of coffee — Top Ten Green Coffee Producers 2006 (millions of metric tons)  Brazil 2.59  Vietnam 0.85 …   Wikipedia

  • Economics of the stage —    In his seminal work, The Business of the Theatre: An Economic History of the American Theatre 1750 1932, Alfred L. Bernheim found that the economic organization of the American theatre changed little from colonial times to the middle of the… …   The Historical Dictionary of the American Theater

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”