We develop a generalized approach to the treatment of household inequality aspects of social welfare in general
equilibrium models of trade. We follow a dual approach, highlighting how general equilibrium distributional aspects of social welfare related to import protection
may be examined alongside corresponding efficiency aspects. We work with a social welfare function that is explicitly separable between mean income and income
dispersion. Our results compliment the set of standard inequality results in trade theory that are focused strictly on functional rather than household inequality.
As an application of the theoretical framework, we then examine the direct impact of inequality on a government's objective function. We find that equity
considerations may serve to counter lobbying interests in both capital-rich and capital-poor countries, though with an opposite marginal impact on the final policy
outcome. We also identify a new theoretical basis for potential protectionist bias on the part of
welfare maximizing governments in capital-rich countries in the Heckscher-Ohlin model. Our dual framework also offers a possible empirical framework for
decomposition of policy-induced price changes into household inequality for a broad class of models.
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