The unidimensional pigou–dalton transfer principle demands that a regressive transfer in income—a transfer from worse-off (poor) to better-off (rich)—decreases social welfare. In a multidimensional setting the direct link between income (or any other attribute) and individual well-being is absent. We interpret the social welfare level of a distribution in which each individual has the same bundle as the individual well-being level. We define regressivity on the basis of this individual well-being ranking. In a setting with both transferable and non-transferable attributes, the imposition of the ensuing “consistent” pigou–dalton principle forces individual well-being to have a quasi-linear structure in the transferable attributes. Since we allow for transferable and non-transferable attributes, our result provides a normative underpinning for criteria in the distinct literatures of multidimensional inequality measurement (only transferable attributes) and of needs (one transferable and one non-transferable attribute).
Bosmans, K. G. M., Lauwers, L., & Ooghe, E. (2009). A consistent multidimensional Pigou-Dalton transfer principle. Journal of Economic Theory, 144(3), 1358-1371. https://doi.org/10.1016/j.jet.2009.01.003