Ricerc@Sapienza

The derivation of normative criteria for ranking distributions is at the core of welfare economics as these criteria are widely adopted to evaluate the performances of societies and, in particular, to evaluate the welfare and distributional implications of the introduction of new public policies and fiscal reforms. However, the existing frameworks impose a focus (on inequality at) the bottom of the distribution that in some cases can arise to be arbitrary and their informational content is confined to a short run perspective. This project will contribute to the existing literature by providing new normative criteria, within a self-contained and unifying framework, that will not suffer from these restrictions and by applying such criteria to real data through estimation techniques recently introduced in the econometrics literature.
The first part of the project will be aimed at developing the theoretical model to rank distributions in the short run that will account for the whole profile of inequality. The second part of the project will be aimed at extending such framework for the assessment of mobility processes so to obtain an evaluation of distributions in the long run. Differently from the existing contributions that incorporate aversion to inequality at the bottom of the distribution, our model will incorporate alternative attitudes toward inequality ¿ namely aversion to inequality at the top and middle part of the distribution - by imposing different restrictions on the set of social preferences and will make them coexist by introducing new prioritarian principles. The third part of the project will be aimed at proposing estimation methods for the empirical implementability of these criteria. In particular, a generalization of the smooth transition regression will be developed. Such generalization, being characterized by multilevel asymmetry, will be able to account for a different behaviour at the tails of the distribution both in the short and long run.