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Equity, or economic equality, is the concept or idea of fairness in
economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interact ...

economics
, particularly in regard to
taxation A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity In law Law is a system A system is a group of Interaction, interacting or interrelated elements that act accord ...
or
welfare economics Welfare economics is a branch of economics that uses microeconomic Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, tha ...
. More specifically, it may refer to equal life chances regardless of identity, to provide all citizens with a basic and equal minimum of income, goods, and services or to increase funds and commitment for redistribution.Kate Bird 2009
Building a fair future: why equity matters
. London:
Overseas Development Institute The Overseas Development Institute (ODI) is a global affairs think tank, founded in 1960. Formally known as the “Overseas Development Institute”, its mission is "to inspire people to act on injustice and inequality through collaborative res ...


Overview

There are three distinct categories of substantive fairness (equality, equity, and reciprocity) that must be combined and balanced in order to achieve a truly fair society. Inequality and inequities have significantly increased in recent decades, possibly driven by the worldwide economic processes of globalisation, economic liberalisation and integration. This has led to states 'lagging behind' on headline goals such as the
Millennium Development Goals The Millennium Development Goals (MDGs) were eight international development International development or global development is a broad concept denoting the idea that societies and countries have differing levels of "development" on an inte ...
(MDGs) and different levels of inequity between states have been argued to have played a role in the impact of the global economic crisis of 2008–2009. Equity is based on the idea of moral equality.Blaze Bolenbaugh 2009
Equity in development: Why it is important and how to achieve it
London:
Overseas Development Institute The Overseas Development Institute (ODI) is a global affairs think tank, founded in 1960. Formally known as the “Overseas Development Institute”, its mission is "to inspire people to act on injustice and inequality through collaborative res ...
Equity looks at the distribution of capital, goods, and access to services throughout an economy and is often measured using tools such as the
Gini index In economics Economics () is a social science Social science is the Branches of science, branch of science devoted to the study of society, societies and the Social relation, relationships among individuals within those so ...
. Equity may be distinguished from
economic efficiency In microeconomics Microeconomics is a branch of mainstream economics Mainstream economics is the body of knowledge, theories, and models of economics, as taught by universities worldwide, that are generally accepted by economists as a basis ...
in overall evaluation of social welfare. Although 'equity' has broader uses, it may be posed as a counterpart to
economic inequality There are wide varieties of economic inequality, most notably measured using the distribution of income In economics Economics () is a social science that studies the Production (economics), production, distribution (economics), di ...
in yielding a "good"
distributionDistribution may refer to: Mathematics *Distribution (mathematics) Distributions, also known as Schwartz distributions or generalized functions, are objects that generalize the classical notion of functions in mathematical analysis. Distr ...
of wealth. It has been studied in
experimental economics Experimental economics is the application of Experiment, experimental methods to study economic questions. Economic data, Data collected in experiments are used to estimate effect size, test the validity of economic theories, and illuminate market ...
as
inequity aversion Inequity aversion (IA) is the preference for fairness and resistance to incidental inequalities. The social sciences that study inequity aversion include sociology Sociology is the study of society, human social behaviour, patterns of social ...
.


Taxation

In
public finance Public finance is the study of the role of the government A government is the system or group of people governing an organized community, generally a state State may refer to: Arts, entertainment, and media Literature * ''Sta ...
, ''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. ''Vertical equity'' usually refers to the idea that people with a greater ability to pay taxes should pay more. If the rich pay more in proportion to their income, this is known as a ''proportional tax''; if they pay an increasing proportion, this is termed a ''
progressive tax A progressive tax is a tax in which the tax rate increases as the taxable amount increases.Sommerfeld, Ray M., Silvia A. Madeo, Kenneth E. Anderson, Betty R. Jackson (1992), ''Concepts of Taxation'', Dryden Press: Fort Worth, TX The term ''progre ...
'', sometimes associated with
redistribution of wealth Redistribution of income and wealth is the transfer of income and wealth (including physical property) from some individuals to others through a social mechanism such as taxation, welfare, public services, land reform, monetary policies, confisc ...
.


Health care

Horizontal equity means providing equal health care to 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 whether particular social groups receive systematically different levels of care than do other groups. There are many ways to identify preventable or unjust disparities, including the study of health outcomes using
quintile Quintile may refer to: *In statistics, a quantile for the case where the sample or population is divided into fifths *Quintiles, a biotechnology research company based in the United States *Quintile (astrology), a type of astrological aspect for ...
analysis o
concentration indexes


Fair division

Equitability in
fair division In game theory Game theory is the study of mathematical model A mathematical model is a description of a system A system is a group of Interaction, interacting or interrelated elements that act according to a set of rules to form a un ...
means every person’s subjective valuation of their own share of some goods is the same. The surplus procedure (SP) achieves a more complex variant called proportional equitability. For more than two people, a division cannot always both be equitable and
envy-free Envy-freeness, also known as no-envy, is a criterion for fair division. It says that, when resources are allocated among people with equal rights, each person should receive a share that is, in their eyes, at least as good as the share received by a ...
.


See also

*
Equity (law) Equity is a particular body of law that was developed in the English Court of Chancery The Court of Chancery was a court of equity A court of equity, equity court or chancery court is a court A court is any person or institution, ofte ...
*
Educational equity Educational equity, also referred to as "Equity in education", is a contested notion (see 'Criticism'). Ostensibly, it is a measure of achievement, fairness, and opportunity in education. The study of education equity is often linked with the st ...
*
Distributive justice Distributive justice concerns the Social justice, socially just Resource allocation, allocation of resources. Often contrasted with procedural justice, just process, which is concerned with the administration of law, distributive justice concentra ...
*
Excess burden of taxation In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant ...
*
Justice (economics)Justice Justice, one of the four cardinal virtues, by Vitruvio Alberi, 1589–1590. Fresco, corner of the vault, studiolo of the Virgin of Mercy, Madonna of Mercy, Palazzo Altemps, Rome Justice, in its broadest sense, is the principle that peopl ...
*
Progressive tax A progressive tax is a tax in which the tax rate increases as the taxable amount increases.Sommerfeld, Ray M., Silvia A. Madeo, Kenneth E. Anderson, Betty R. Jackson (1992), ''Concepts of Taxation'', Dryden Press: Fort Worth, TX The term ''progre ...
*
Proportional tax A proportional tax is a tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity In law Law is a system A system is a group of Interaction, interacting or interr ...
*
Tax incidence In economics Economics () is a social science Social science is the branch A branch ( or , ) or tree branch (sometimes referred to in botany Botany, also called , plant biology or phytology, is the science of plant l ...
* '' Who Moved My Cheese''


Notes


References

* Anthony B. Atkinson and (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. 1147
1172. * (1995). "Need: The Idea Won't Do — But We Still Need It," ''Social Science and Medicine'', 40(6), pp. 727–730. *Jean-Yves Duclos (2008). "horizontal and vertical equity," ''
The New Palgrave Dictionary of Economics ''The New Palgrave Dictionary of Economics'' (2018), 3rd ed., is an twenty-volume reference work on economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, ...
,'' 2nd Edition
Abstract.
* Allan M. Feldman (1987). "equity," ''
The New Palgrave: A Dictionary of Economics ''The New Palgrave Dictionary of Economics'' (2018), 3rd ed., is an twenty-volume reference work on economics published by Palgrave Macmillan. It contains around 3,000 entries, including many classic essays from the original Inglis Palgrave Dictiona ...
'', v. 2, pp. 182–84. * Peter J. Hammond (1987). "altruism," ''The New Palgrave: A Dictionary of Economics'', v. 1, pp. 85–87. * Serge-Christophe Kolm ( 9722000). ''Justice and Equity''
Description
& chapter-previe
links
MIT Press. *
Julian Le Grand Sir Julian Ernest Michael Le Grand, Fellow of the British Academy, FBA (born 29 May 1945) is a British academic specialising in public policy. He is the Richard Titmuss Professor of Social Policy at the London School of Economics (LSE) and was a sen ...
(1991). ''Equity and Choice: An Essay in Economics and Applied Philosophy''. Chapter previe
links.
* Richard A. Musgrave (1959). ''The Theory of Public Finance: A Study in Political Economy''. *_____ (1987 008. "public finance," ''The New Palgrave: A Dictionary of Economics'', v. 3, pp. 1055–60
Abstract
* Richard A. Musgrave and Peggy B. Musgrave (1973). ''Public Finance in Theory and Practice'' * (2000). ''Economics of the Public Sector'', 3rd ed. Norton. * William Thomson (2008). "fair allocation," ''
The New Palgrave Dictionary of Economics ''The New Palgrave Dictionary of Economics'' (2018), 3rd ed., is an twenty-volume reference work on economics Economics () is a social science that studies the Production (economics), production, distribution (economics), distribution, ...
,'' 2nd Edition
Abstract.
* World Bank. ''World Development Report 2006: Equity and Development'
Summary with ch. links.
* H. Peyton Young (1994). ''Equity: In Theory and Practice''. Princeton University Press
Descriptionpreview
an
chapter 1
*Colombino, U., Locatelli, M., Narazani, E., & O'Donoghue, C. (2010)
Alternative basic income mechanisms: An evaluation exercise with a microeconometric model
''Basic Income Studies'', ''5''(1). {{DEFAULTSORT:Equity (Economics) Fairness criteria Tax incidence Welfare economics