ECONOMICS OF INEQUALITY

The aim of the course is the evaluation of inequality in the distribution of family resources and the presence of poverty in modern economic systems, with particular attention to the ethical implications of the evaluation and the redistributive effects of public sector intervention.

1. Knowledge and comprehension skills:
1.1. understand the problems and motivations of the economic measurement of the distribution of resources between individuals and families;
1.2. understand how the state can intervene to redistribute income and wealth;
1.3. understand the effects on inequality and poverty of the main global economic phenomena.

2. Apply knowledge and comprehension skills:
2.1. use social choice models to measure the equity of public intervention;
2.2. knowing how to identify the degree of inequality and poverty in modern economies;

3. Use of independent Judgement:
3.1. interpret the reasons for public intervention;
3.2. understand the impact of social choices on the redistribution of resources;
3.3. reflect on the effects of the main global trends on poverty and inequality.

Mandatory priority Exams: ECONOMIA POLITICA (see https://www.unive.it/pag/203/ )
Prerequisite: SCIENZA DELLE FINANZE

1. Introduction to the economics of individual’s and household’s well-being
1.1. Individual’s and household’s well-being. Effects of household’s characteristics.
1.2. Microeconomic analysis (direct and indirect utility, demand function, expenditure function) with household’s characteristics.
1.3. Equivalence scales (Engel, Rothbart, OECD, ISEE) and equivalent income.
2. Measurement of inequality
2.1. Statistical approach. Lorenz curves and Gini index.
2.2. Axiomatic approach (Dalton)
2.3. Ethical approach to inequality measurement (Atkinson)
3. Measurement of poverty
3.1. Axiomatic approach (Atkinson)
3.2. Ethical measurement of poverty (Sen)
4. Public budget and redistribution of income
4.1. Progressivity and redistributive effects of taxes and subsidies: (concentration indices, Kakwani, Suits, Reynolds-Smolensky)
4.2. Tax-benefit microsimulation models
5. Interactive seminars on some specific topics. E.g.: Inequality of income and wealth (Piketty); World inequality (Milanovic); Inequality and climate change; Economy of happiness.

• Baldini M., Toso S. Diseguaglianza, povertà e politiche pubbliche, Il Mulino, Bologna, Edizione 2009.
• Lecture notes / slides prepared by the teacher.
• Selection of articles for seminars.

- The written test consists of questions aimed at verifying the learning of concepts and the ability to apply them to concrete cases. There is no oral exam.
- Duration of the written exam: max 1h
- The questions can be: (i) theoretical, (ii) analytical exercises, (iii) numerical exercises, (iv) multiple choice questions.
Exercises and examples of exam questions with the solutions will be included on Moodle.

The course is organized in:
a) lectures,
b) classroom exercises,
c) student presentations in seminars and individual study.

Italian

Further information will be available in Moodle

written

This subject deals with topics related to the macro-area "Poverty and inequalities" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development