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We show that a social planner who seeks to allocate a given sum in order to reduce efficiently the social stress of a population, as measured by the aggregate relative…
We show that a social planner who seeks to allocate a given sum in order to reduce efficiently the social stress of a population, as measured by the aggregate relative deprivation of the population, pursues a disbursement procedure that is identical to the procedure adhered to by a Rawlsian social planner who seeks to allocate the same sum in order to maximize the Rawlsian maximin-based social welfare function. Thus, the constrained minimization of aggregate relative deprivation constitutes an economics-based rationale for the philosophy-based constrained maximization of the Rawlsian social welfare function.
Let there be two individuals: “rich,” and “poor.” Due to inefficiency of the income redistribution policy, if a social planner were to tax the rich in order to transfer to…
Let there be two individuals: “rich,” and “poor.” Due to inefficiency of the income redistribution policy, if a social planner were to tax the rich in order to transfer to the poor, only a fraction of the taxed income would be given to the poor. Under such inefficiency and a standard utility specification, a Rawlsian social planner who seeks to maximize the utility of the worst-off individual will select a different allocation of incomes than a utilitarian social planner who seeks to maximize the sum of the individuals’ utilities. However, when individuals prefer not only to have more income but also not to have low status conceptualized as low relative income, and when this distaste is incorporated in the individuals’ utility functions with a weight that is greater than a specified critical level, then a utilitarian social planner will select the very same income distribution as a Rawlsian social planner.
The purpose of this paper is to provide an exposition of the concepts relevant to measuring the economic effect of premature mortality and the conception of how the social…
The purpose of this paper is to provide an exposition of the concepts relevant to measuring the economic effect of premature mortality and the conception of how the social loss from premature mortality can be incorporated into social welfare measurement. None of the conventional welfare measures currently pick up this welfare signal.
Various concepts are examined in the conventional and “new” literatures of welfare measurement. Six Venn diagrams show how various concepts “fit together”.
This paper outlines a framework for measuring the economic effect of premature mortality in a conceptually appropriate way. Thus the paper shows how the welfare loss associated with premature mortality can be incorporated into social welfare measurement.
Accurate premature mortality measurement is difficult but this data problem hardly limits this exercise. Sensitivity analyses can alleviate this measurement problem.
The main practical implication is that empirical applications are feasible. Time series data can be analysed from this conceptual framework to determine whether the problem of the social loss from premature mortality is improving through time, or worsening.
Knowing the size of the welfare impact of premature mortality is useful not only on policy fronts concerning premature mortality prevention.
“New welfare measurement” has not yet been applied to the notion of the social loss from premature mortality.
The starting‐point of the article is the inconsistency between theestablished practice of acceptance in many cases, of economic policy(i.e. progressive taxation, national…
The starting‐point of the article is the inconsistency between the established practice of acceptance in many cases, of economic policy (i.e. progressive taxation, national insurance policies) and the theoretical rejection of interpersonal comparisons of utility who see it as an unscientific value judgement. The inconsistency is explained by identifying three groups of theorists: (1) those who thought of comparability as a value judgement and unacceptable for economic policy considerations (positivists), (2) those who agreed with the positivists, on the normative nature of comparability but accepted it as a basis for economic policy, and (3) those who thought of it as part of a scientific economics. The implication was that, despite the dominance of positivist methodology in other sub‐fields, the historical experience points to the difficulty of applying positivist methodology to the issue of comparability. If the inconsistency is thus due to the inappropriateness of the positivist approach, the only possible solution is the explicit abandonment of this approach at least in matters related to the collective aspects of economics.
It is possible to employ either income or expenditure as the base for personal taxation. A considerable literature has developed that investigates the relative efficiency…
It is possible to employ either income or expenditure as the base for personal taxation. A considerable literature has developed that investigates the relative efficiency of these bases. The answer is usually in favor of the expenditure tax since it does not distort the choice between consumption and saving. In contrast, the literature is almost silent on the relative equity of the two bases. We investigate the redistributive consequences of the choice in models with two sources of heterogeneity: skill in employment and lump-sum endowment. The Gini coefficient is used to measure the degree of equity achieved by the tax bases in static and dynamic settings. Income taxes and expenditure taxes that generate equal welfare or equal revenue are compared. In the static economy the income tax leads to lower inequality except when skill and endowment are negatively correlated. Inequality is always lower with the income tax in the dynamic economy. These results support the choice of income as the base for personal taxation if reduction in inequality is a priority of policy.
The purpose of this paper is to develop principles through which the global economic structure could become more equal and just; it begins by demonstrating that world…
The purpose of this paper is to develop principles through which the global economic structure could become more equal and just; it begins by demonstrating that world poverty is pervasive, and that the global economic structure is very unequal.
The paper utilizes conceptual/theoretical arguments in welfare economics, utilitarianism, Sen's capability approach, and Rawlsian theories of justice to argue that none of those theories can lead to a more equal global economic structure. Thus, the development of more egalitarian principles is needed.
Arguing that the principles that Rawls developed in his 1999 The Law of Peoples are more egalitarian than the other theories, the paper still finds them less than adequate. However, the principles developed in the paper can lead the world toward a more just and much more egalitarian economic structure.
Since the principles developed in the paper are more egalitarian, helping toward ending world poverty and extreme inequality, the paper and its findings constitute an original and a valuable contribution.