What does equity refer to in an economic context?

In an economic context, equity refers to the fair distribution of resources and wealth among individuals and groups within a society. The concept of equity emphasizes fairness and justice in the allocation of resources, recognizing that different individuals may have varying needs based on factors such as income, social status, and access to opportunities. Equity addresses the important question of how resources should be distributed to achieve a more balanced and just society, rather than merely focusing on overall economic efficiency or maximization of profits.

For example, policies aimed at increasing equity might involve progressive taxation, social welfare programs, or regulations that seek to reduce economic disparities. This understanding of equity as fairness contrasts with other economic goals such as efficiency, which prioritizes optimizing resource allocation for productivity rather than considering how benefits and burdens are shared among different members of society.