Journal Article A Comment on Measuring Horizontal Equity Get access Robert Plotnick Robert Plotnick Dartmouth College Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 95, Issue 2, September 1980, Pages 383–385, https://doi.org/10.2307/1885507 Published: 01 September 1980

POLITICIANS, academicians and the general public alike have perceived that the status quo tax and transfer legislation creates inequities among living units. Tax laws create numerous situations in which living units with seemingly equal abilities to pay are taxed quite different amounts. State-by-state differences in welfare eligibility rules, benefit schedules and administrative procedures, the general unavailability of cash welfare to childless, nonaged, healthy couples and single individuals, and other features of transfer programs similarly provide vastly different levels of income support to units with 'equal needs. ' Advocates of major tax and welfare reform have marshalled such evidence into a central argument in favor of their proposals. While there is wide agreement that the process of redistributing incomes abounds with inequities, there have been few attempts to quantify their extent.2 This paper develops a measure of horizontal inequity and illustrates its use. Section II discusses the concept of horizontal equity, then builds upon familiar Lorenz curve-Gini coefficient analysis to derive the inequity index. The third part considers some problems of implementing the measure and illustrates it. Section IV provides a short conclusion.

For helpful comments on earlier drafts, we thank, without implicating, Moses Abramovitz, Yves Balcer, John Bishop, Alan Blinder, Richard Burkhauser, Michael Darby, Irwin Garfinkel, Alan Gustman, Daniel Hamermesh, Martin Holmer, George Jakubson, Robert Lampman, Paul Menchik, Robert Moffitt, Michael Murray, Joseph Quinn, Timothy Smeeding, Eugene Smolensky, Barbara Wolfe and two anonymous referees.

An interest group model of the determinants of policies which directly re distribute income to low income persons is developed and tested. The model assum es that altruistic taxpayers, nonaltruistic taxpayers, and needy beneficiaries f orm separate interest groups from which politicians seek support. Benefit levels depend on variables such as taxpayer income and the price of benefits but, unlike median voter models, the model also implies a role for interest group strengt h and competition between political parties. The author uses latent variable met hods and data on the Aid to Families with Dependent Children program to demonstr ate empirical support forthe model.

We develop an empirical model of adolescent premarital childbearing in which a woman's decisions affect a sequence of outcomes: premarital pregnancy, pregnancy resolution, and the occurrence of marriage before the birth. State welfare, abortion, and family planning policies alter the costs and benefits of these outcomes. For white adolescents welfare, abortion, and family planning policy variables have significant effects on these outcomes consistent with theoretical expectations. Black adolescents' behavior shows no association with the policy variables. The different racial results may reflect differences in sample size or important unmeasured racial differences in factors that influence fertility and marital behavior.