A quantitative method for benchmarking fair income distribution
Concern about income inequality has become prominent in public discourse around the world. However, studies in behavioral economics and psychology have consistently shown that people prefer not equal but fair income distributions. Thus, finding a benchmark that could be used to measure fair income d...
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| Format: | Article |
| Language: | English |
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Elsevier
2022-09-01
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| Series: | Heliyon |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2405844022017996 |
| _version_ | 1818028609531543552 |
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| author | Thitithep Sitthiyot Kanyarat Holasut |
| author_facet | Thitithep Sitthiyot Kanyarat Holasut |
| author_sort | Thitithep Sitthiyot |
| collection | DOAJ |
| description | Concern about income inequality has become prominent in public discourse around the world. However, studies in behavioral economics and psychology have consistently shown that people prefer not equal but fair income distributions. Thus, finding a benchmark that could be used to measure fair income distribution across countries is a theoretical and practical challenge. Here a method for benchmarking fair income distribution is introduced. The benchmark is constructed based on the concepts of procedural justice, distributive justice, and authority’s power in professional sports since it is not only widely agreed as an international norm that the allocations of athlete’s salary are outcomes of fair rules, individual and/or team performance, and luck but also in line with no-envy principle of fair allocation. Using the World Bank data, this study demonstrates how the benchmark could be used to quantitatively gauge whether, for a particular value of the Gini index, the income shares by quintile of a country are the fair shares or not, and if not, what fair income shares by quintile of that country should be. Knowing this could be useful for those involved in setting targets for the Gini index and the fair income shares that are appropriate for the context of each individual country before formulating policies towards achieving the Sustainable Development Goal 10 and other related SDGs. |
| first_indexed | 2024-12-10T05:06:31Z |
| format | Article |
| id | doaj.art-9b774a3d67fd4cbf8a3e0da579cd5855 |
| institution | Directory Open Access Journal |
| issn | 2405-8440 |
| language | English |
| last_indexed | 2024-12-10T05:06:31Z |
| publishDate | 2022-09-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Heliyon |
| spelling | doaj.art-9b774a3d67fd4cbf8a3e0da579cd58552022-12-22T02:01:13ZengElsevierHeliyon2405-84402022-09-0189e10511A quantitative method for benchmarking fair income distributionThitithep Sitthiyot0Kanyarat Holasut1Department of Banking and Finance, Faculty of Commerce and Accountancy, Chulalongkorn University, Mahitaladhibesra Bld., 10th Fl., Phayathai Rd., Pathumwan, Bangkok, 10330, Thailand; Corresponding author.Department of Chemical Engineering, Faculty of Engineering, Khon Kaen University, Mittapap Rd., Muang District, Khon Kaen, 40002, ThailandConcern about income inequality has become prominent in public discourse around the world. However, studies in behavioral economics and psychology have consistently shown that people prefer not equal but fair income distributions. Thus, finding a benchmark that could be used to measure fair income distribution across countries is a theoretical and practical challenge. Here a method for benchmarking fair income distribution is introduced. The benchmark is constructed based on the concepts of procedural justice, distributive justice, and authority’s power in professional sports since it is not only widely agreed as an international norm that the allocations of athlete’s salary are outcomes of fair rules, individual and/or team performance, and luck but also in line with no-envy principle of fair allocation. Using the World Bank data, this study demonstrates how the benchmark could be used to quantitatively gauge whether, for a particular value of the Gini index, the income shares by quintile of a country are the fair shares or not, and if not, what fair income shares by quintile of that country should be. Knowing this could be useful for those involved in setting targets for the Gini index and the fair income shares that are appropriate for the context of each individual country before formulating policies towards achieving the Sustainable Development Goal 10 and other related SDGs.http://www.sciencedirect.com/science/article/pii/S2405844022017996FairnessIncome distributionInequalityGini indexSustainable Development Goals |
| spellingShingle | Thitithep Sitthiyot Kanyarat Holasut A quantitative method for benchmarking fair income distribution Heliyon Fairness Income distribution Inequality Gini index Sustainable Development Goals |
| title | A quantitative method for benchmarking fair income distribution |
| title_full | A quantitative method for benchmarking fair income distribution |
| title_fullStr | A quantitative method for benchmarking fair income distribution |
| title_full_unstemmed | A quantitative method for benchmarking fair income distribution |
| title_short | A quantitative method for benchmarking fair income distribution |
| title_sort | quantitative method for benchmarking fair income distribution |
| topic | Fairness Income distribution Inequality Gini index Sustainable Development Goals |
| url | http://www.sciencedirect.com/science/article/pii/S2405844022017996 |
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