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8.2 Equity and Redistribution of Income and Wealth
Homearrow_rightRevision Notes arrow_right A Level arrow_right Government Microeconomic Intervention arrow_right Equity And Redistribution Of Income And Wealth
8.2.1 Difference between equity and equality
Definition: Equality means everyone has the same income, wealth or access (equal outcomes or equal shares). Equity means fairness: a distribution that is considered just. Equity is a normative concept; what is fair depends on value judgements.

Horizontal equity: people in the same circumstances are treated the same (two people with the same income pay the same tax). Vertical equity: people in different circumstances are treated differently in a fair way (higher earners pay a higher share in tax). Equal outcomes may be inequitable if they ignore effort or need; an equitable distribution need not be equal.

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