Two Types of Income Inequality

Brandon T. Minster

Advisor: David M Levy, PhD, Department of Economics

Committee Members: Peter J. Boettke, Donald J. Boudreaux

Online Location, Online
August 13, 2020, 09:00 AM to 11:00 AM


This dissertation reviews recent work in economic inequality, showing the major philosophical differences between two prevailing ways of looking at inequality, the sources, and the implications of this division.

Chapter One reviews present work on inequality, explaining the change from inequality as measured against a standard (objective inequality) to inequality as measured against the well-being of others (subjective inequality). I develop an argument for why this has happened, and an explanation for why the shift has been incomplete.

Chapter Two shows the tendency among economists to use a Rawlsian understanding of well-being contributes to the misunderstanding. The standard “equity versus efficiency” context of welfare economics is misused in this situation. The disagreement is not over the merits of increasing equity, but over the source of equity itself.

Chapter Three covers recent empirical work regarding welfare. Increased empirics and more-precise positive economics cannot eliminate the normative question of what the basis of welfare should be.