Using French data, we show that ELIE performs rather weakly when it comes to addressing the issue of poverty. Yet, eliminating poverty is also a valid normative property of any redistribution mechanism. We suggest combining ELIE with another redistributive solution aimed specifically at alleviating poverty: the personal allowance (PERAL) mechanism (Leroux 2004 and 2007). We argue that ELIE and the PERAL mechanism, more than being compatible, are in fact complementary.
We consider a situation in which a central authority must allocate non-tradeable and non-marketable goods between a group of individuals in a fair way. There are exogenous divisibility constraints imposed on the goods to be allocated. The authority has absolutely no information on the preferences of the recipients; moreover, no interaction is allowed among recipients or between the authority and the recipients. Envy-freeness is the equity criterion adopted. Using a remarkable property of simplices (which we introduce and prove) we argue that assigning bundles of equal expected value (forming what is called in this paper the class of “balanced allocations”) is hardly fair unless extra effort is made to discriminate between these proposed allocations.