What is the Dalton transfer principle?

The society will be better off when a unit of income is transferred from a richer individual to a poorer individual. This is the Dalton’s principle of transfer for income redistribution. You can read about the Kuznets Curve – Explanation of the Kuznets curve, its Criticisms in the given link.

The unidimensional Pigou–Dalton transfer principle demands that a regressive transfer in income, i.e. a transfer from poor individuals to rich individuals decreases social welfare.

Further readings:

  1. Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes]
  2. Indian Economy Notes For UPSC Exam [Download PDFs]

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