Working Paper Series 2302 - The Welfare Cost of Inequality - Caspar Kaiser

The greater the curvature of the relationship, the greater this effect. [...] Finally, although the results are qualitatively robust to the choice of wellbeing measure, choice of estimation method, and the use of panel data, the exact size of the estimated welfare cost of inequality does depend on these choices. [...] 6 doi.org/10.5287/ora-o1pkvzgpm Wellbeing Research Centre, Oxford 2302 | Working Paper Series to 5, and set 𝑡1 to be at the 1 st percentile of the observed distribution of household incomes, 𝑡2 to the 10th percentile, 𝑡3 to the 50 th percentile, 𝑡 to the 90th4 percentile, and 𝑡5 to the 99 th percentile.6 Independently of the particular specification chosen, estimates of equation (1) can be us. [...] 4.2 Estimates of the welfare loss from inequality The previous section estimated the curvature of the income-to-wellbeing relationship. [...] Collecting funds: The first approach is to level the incomes of the top 𝑞% of the income distribution.