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The social valuation of income: a survey approach

David John Evans (Department of Accounting, Finance and Economics, Oxford Brookes University, Oxford, UK)
Erhun Kula (Faculty of Economics and Administrative Science, Bahcesehir University, Istanbul, Turkey)
Yoko Nagase (Department of Accounting, Finance and Economics, Oxford Brookes University, Oxford, UK)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 10 November 2014

Abstract

Purpose

The purpose of this paper is to estimate survey-based values of the elasticity of marginal social valuation of income, an important welfare parameter in cost-benefit analysis.

Design/methodology/approach

A model relating equity welfare weights to income is developed, and iso-elasticity of marginal valuation of income is tested using survey data obtained from a sample of Turkish politicians who are instrumental in policy making.

Findings

Based on the survey feedback, formal statistical testing indicates that Turkish politicians, regardless of party allegiance, reveal preferences consistent with an iso-elastic marginal social valuation of income. The estimated value of the elasticity measure is close to unity for each of the political parties.

Originality/value

The originality of the paper is in terms of the survey method used to obtain from Turkish politicians estimates of the marginal social valuation of income. This welfare parameter is needed in the calculation of both social discount rates and welfare weights. The paper will be of interest to academics in the field of welfare economics as well as to practitioners involved in the appraisal of social projects and policies.

Keywords

Citation

Evans, D.J., Kula, E. and Nagase, Y. (2014), "The social valuation of income: a survey approach", Journal of Economic Studies, Vol. 41 No. 6, pp. 808-820. https://doi.org/10.1108/JES-01-2013-0011

Publisher

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Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited