Equity (economics)
Equity, or economic equality, is the concept or idea of fairness in economics, particularly in regard to taxation or welfare economics. More specifically, it may refer to equal life chances regardless of identity, to provide all citizens with a basic and equal minimum of income, goods, and services or to increase funds and commitment for redistribution. Overview. There are three distinct categories of substantive fairness (equality, equity, and reciprocity) that must be combined and balanced in order to achieve a truly fair society. Inequality and inequities have significantly increased in recent decades, possibly driven by the worldwide economic  processes of globalisation, economic liberalisation and integration. This has led to states 'lagging behind' on headline goals such as the Millennium Development Goals (MDGs) and different levels of inequity between states have been argued to have played a role in the impact of the global economic crisis of 2008–2009. Equity is based on the idea of moral equality. Equity looks at the distribution of capital, goods, and access to services throughout an economy and is often measured using tools such as the Gini index. Equity may be distinguished from economic efficiency in overall evaluation of social welfare. Although 'equity' has  broader uses, it may be posed as a counterpart to economic inequality in yielding a "good" distribution of wealth. It has been studied in experimental economics as inequity aversion. Taxation. In public finance, "horizontal equity" is the idea that people with a similar ability to pay taxes should pay the same or similar amounts. It is related to the concept of "tax neutrality" or the idea that the tax system should not discriminate between similar things or people, or unduly distort behavior. "Vertical equity" usually refers to the idea that people with a greater ability to pay taxes should pay  more. If the rich pay more in proportion to their income, this is known as a "proportional tax"; if they pay an increasing proportion, this is termed a "progressive tax", sometimes associated with redistribution of wealth. Health care. Horizontal equity means providing equal health care to those who are the same in a relevant respect (such as having the same 'need'). Vertical equity means treating differently those who are different in relevant respects – such as having different 'need' (Culyer, 1995). Health studies of equity whether particular social groups receive systematically different levels of care than do other groups. There are  many ways to identify preventable or unjust disparities, including the study of health outcomes using quintile analysis or concentration indexes. Fair division. Equitability in fair division means every person’s subjective valuation of their own share of some goods is the same. The surplus procedure (SP) achieves a more complex variant called proportional equitability. For more than two people, a division cannot always both be equitable and envy-free.