Increasing efficiency in generating national income and improving equity in its distribution
among economic agents is at the forefront of priorities of most modern economies. This book
presents a model which aims to maximize a symmetrical welfare function under certain
constraints which consider both efficiency and equity i.e. taxes and subsidies implemented by
a public authority. The model is numerically implemented and considers a set of economic agents
with starting incomes that satisfy Pareto income law under various values of the alpha
parameter. Also the model implementations respect the social production function. Various
experiments are presented which show how income inequality (measured by means of the Lorenz
curve and what I call the Lorenz-Gini inequality index) and measures of poverty are sensibly
reduced by redistributing national income without lowering efficiency in production. A case
study or application of Italian personal income in 2008 is also presented.
