Sophie’s paper

Helpful readers have found online a copy of Sophie Elliott’s paper, mentioned in the media this morning. The foreword is pretty special and moving, so I reproduce it here:

In February 2007, we shared the teaching in an upper level Microeconomics seminar at the University of Otago in Dunedin, New Zealand. Sophie Elliott was one of the students. Sophie’s scholarly term paper, ‘Why measure inequality? A discussion of the concept of equality’, presented here in slightly abridged form, was easily the best essay on equity and equality either of us had ever read.

Sophie completed her degree in November 2007 and was on the brink of an exciting career. And then we learned of Sophie’s death. Sophie died on January 9th 2008, just one day before she was supposed to travel to Wellington to take up her first position at the New Zealand Treasury. She was brutally attacked and stabbed to death in her
own bedroom.

In her paper, Sophie examined the contrasting viewpoints and analyzes of a dozen of the main thinkers – both philosophers and economists – who are today concerned with equity as a fundamental value in society, and indicated at many points, gently but firmly, what she herself believes. We found Sophie’s essay stunningly to-the-point, thoughtful and mature.

Jean-Yves Duclos, editor of the Journal of Economic Inequality, wrote to one of us about Sophie’s paper in these terms: ‘It is a remarkable piece of research for such a young person. In just a few paragraphs, the paper is able to strike right to the core of welfare economics and to grasp with many of its complex philosophical and ethical issues. Elliott certainly had a beautiful mind’.

In Sophie’s paper, the reader will find many questions to ponder. Should a policy be about the people who deserve to be treated equally rather than those who are treated equally? How should we treat benevolence in society? Do we wish to make people in society equal in terms of the things that do generate welfare, or in terms of the things that should generate welfare? Does the prosperity of one person negatively affect the fortunes of some others? What do we mean by equal opportunities, and by equal reward for equal effort? Are market-generated outcomes necessarily unfair? If so, is the lack of compensation for this unfairness morally wrong?

We have both felt Sophie’s loss, in this awful calamity, very deeply indeed. We are proud to have been her teachers and we commend her inspirational essay to the readers of Oxonomics.

There was something magical about Sophie Elliott – everybody who knew her felt it, and everybody who knew her loved her, all but for one person. Rest in peace, Sophie.

What a wonderful tribute to her. And such a nice counter to the days of vileness from he who shall not be named.

A small extract from the paper itself. This will probably only appeal to economists!

Horizontal equity is conventionally defined as the principle that equals should be treated equally, and vertical equity, that unequals should be treated unequally. Galbiati and Vertova (2008) focus on horizontal equity, arguing that the above definition is flawed, as policies, by default, treat those they define as ‘equals’ equally.

The correct assessment of the horizontal inequity caused by a policy is in the policy’s choice of relevant characteristics1 that determine the ‘equals’.

If these characteristics are seen to be normatively inappropriate in reference to the intended effect of the policy, then the policy is said to be horizontally inequitable to some degree. That is, if those who should be treated as equals under the policy, in that they share relevant characteristics, are treated as unequals by the policy rule, the policy is considered unfair under this definition.

It is as Peter Westen states in his book on equality (see Westen, 1990): the presumption of equality is that people should be treated equally in the absence of good reasons for treating them unequally, such as a difference in relevant characteristics.

Lambert and Yitzhaki (1995) explain that horizontal and vertical equity serve different purposes. The former is an idea relating to justice, helping to ‘ensure that the law does not serve anybody’s self-interest’. The latter is a principle that prevents warped applications of the former, and, if satisfied, is sufficient to implement the former.

Consider a country with two types of people, those who love ducks and those who hate ducks. If the government gives everyone three ducks each, it has treated all the ducklovers equally, and all the duck-haters equally, thus satisfying the principle of horizontal equity when given its conventional definition.

However it does not satisfy the principle of vertical equity, as the two distinct groups are treated the same in relation to a characteristic that must be considered relevant in the distribution of ducks. Distributing the ducks in this apparently even-handed way actually results in an unfair outcome; hence we have an example of an equal distribution that does not achieve its fundamental aim of equity.

This illustrates the importance of considering both horizontal and vertical equity in theories of equality.

The full paper is only 10 pages, and as I said very interesting for those who are into economics.