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A transfer from a richer individual to a poorer one seems to be the most intuitive and straightforward way of reducing income inequality in a society. However, can such a…
A transfer from a richer individual to a poorer one seems to be the most intuitive and straightforward way of reducing income inequality in a society. However, can such a transfer reduce the welfare of the society? We show that a rich-to-poor transfer can induce a response in the individuals’ behaviors which actually exacerbates, rather than reduces, income inequality as measured by the Gini index. We use this result as an input in assessing the social welfare consequence of the transfer. Measuring social welfare by Sen’s social welfare function, we show that the transfer reduces social welfare. These two results are possible even for individuals whose utility functions are relatively simple (namely, at most quadratic in all terms) and incorporate a distaste for low relative income. We first present the two results for a population of two individuals. We subsequently provide several generalizations. We show that our argument holds for a population of any size, and that the choice of utility functions which trigger this response is not singular – the results obtain for an open set of the space of admissible utility functions. In addition, we show that a rich-to-poor transfer can exacerbate inequality when we employ Lorenz-domination, and that it can decrease social welfare when we draw on any increasing, Schur-concave welfare function.
The purpose of this paper is to examine the level of cardinal welfare based on Sen’s index using both Pareto and non-Pareto states besides evaluating the effective factors…
The purpose of this paper is to examine the level of cardinal welfare based on Sen’s index using both Pareto and non-Pareto states besides evaluating the effective factors on the welfare changes according to a fuzzy least-squares regression model.
The social welfare functions express the optimal social allocations in the public economics. Therefore, they can be applied as a tool to represent the difference of utility allocations among consumers. There are various criteria on the literature pertaining to the social welfare functions such as those of Dasgupta et al. (1970), Sheshinski (1972), Sen (1974), Yitzhaki (1979), Shorrocks (1983), Kakwani (1984), Dagum (1990, 1993), Mukhopadhaya (2003), and Mukhopadhaya and Rao (2001). The Sen’s welfare function because of strong theoretical basis and enjoying the welfare axioms is more celebrated among others so that it is a function of individual utilities resulting from the individual’s social positions.
The findings indicate that the welfare level has increased by about 4.8 percent during the period 2002-2007; by nearly 3.1 percent during 1997-2001 and mature to 2.7 percent from 1992 to 1996 such that the period 1997-2007 has had the highest level of social welfare improvement in Iran. The results obtained from the fuzzy regression show that the unemployment rate, inflation rate and Gini coefficient variables have an adverse relation with the cardinal welfare in both Pareto and non-Pareto cases, while the literacy rate and government expenditures have a positive relation with the welfare index. The findings also imply that there is a positive relationship between economic growth and welfare level in Iran.
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In the context of social sustainability, characterization of sustainable development embroils a process of growth not only without social disruption but also without the…
In the context of social sustainability, characterization of sustainable development embroils a process of growth not only without social disruption but also without the involvement of any severe risk of environmental collapse of the ecosystem. Economic, social, and environmental aspects in an interactive setup determine the different dimensions of sustainability. In this backdrop, this chapter focuses on the dimensions of social sustainability of the development process – particularly with an eye on the determining factors of social tension resulting in social disruption which in turn become noticeable through violent forms of different types of crime – homicides (murder), property-related crimes (dacoity, robbery, burglary, and theft), and riots. Although the occurrences of such crimes in an indicator of weakness in the law and order of the state, one needs to evaluate the significant role played by various types of deprivation and discrimination. This study attempts to find out the role played by economic deprivation for the incidence of such crimes in the presence of infrastructural and socioeconomic developmental factors. This analysis is performed in the context of India using generalized method of moments (GMM) structure with panel data of 16 major Indian states from 2005 to 2016.
This paper is an attempt to understand how Amartya Sen's thinking on development and freedom has evolved from his critique of welfare economics and his concern with underdevelopment and poverty. It is argued that Sen has done a great deal to rescue welfare economics from the consequences of methodological individualism by seeking an objective basis for comparisons of well‐being, by insisting on the need for interpersonal comparability and by creating a space for normative evaluations. Sen's contribution to the human development approach with its emphasis on positive freedom has also helped to provide a valuable counterweight to the dominant free market approach. However, some concerns are expressed that the approach does not give sufficient attention to long‐run dynamics and that the conception of capability employed is not helpful for the understanding of development
According to Kolm (1998, p. 3), social ethics addresses the question ‘what should be done in society?’ The topic of justice constitutes a very large part of social ethics…
According to Kolm (1998, p. 3), social ethics addresses the question ‘what should be done in society?’ The topic of justice constitutes a very large part of social ethics although other virtues are also important. Kolm distinguishes between macro-justice and micro-justice. For the former, Kolm proposes ‘a combination of the three rationales of rights and duties about capacities: process-freedom, partial income equalisation by efficient means, and the satisfaction of basic needs and the alleviation of deep suffering’. Sen (1992, pp. ix, 21–22, 150) argues that ‘a common characteristic of virtually all the approaches to the ethics of social arrangements that have stood the test of time is to want equality of something – something that has an important place in the particular theory’. For example, even libertarian thinkers such as Nozick who are perceived as being anti-egalitarian place importance on people having liberty and hence that equality of liberties is important. Sen's own capability approach ‘has something to offer both to the evaluation of well-being and to the assessment of freedom’.
Theories of the family are outlined and related to the socioeconomic deprivation of females and children giving Indian illustrations. The importance of Sen’s entitlement…
Theories of the family are outlined and related to the socioeconomic deprivation of females and children giving Indian illustrations. The importance of Sen’s entitlement approach is critically discussed in this context. Although international bodies, such as the UNDP, recognise the importance of gender issues in development, UNDP’s Gender Development Index is found to be a poor indicator of female and family welfare. The question is then investigated of how women and children are faring under structural adjustment policies and in transition. Structural adjustment policies have increased the incidence of poverty among women and children in subsistence contexts and in some former centrally planned economies. Furthermore, disadvantaged wives and children are at increasing risk of falling through social safety nets as the welfare state continues to be dismantled in western economies. Changed social welfare regimes reduce opportunities for disadvantaged children. Unfortunately, many neo‐liberals continue to approach welfare services purely from the cost side and fail to see that the supply of social welfare services can raise productivity and promote social justice. Economists should not avoid discussions of social justice.
This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over…
This chapter conducts a systematic comparison of behavioral economics’s challenges to the standard accounts of economic behaviors within three dimensions: under risk, over time, and regarding other people. A new perspective on two underlying methodological issues, i.e., inter-disciplinarity and the positive/normative distinction, is proposed by following the entanglement thesis of Hilary Putnam, Vivian Walsh, and Amartya Sen. This thesis holds that facts, values, and conventions have inter-dependent meanings in science which can be understood by scrutinizing formal and ordinary language uses. The goal is to provide a broad and self-contained picture of how behavioral economics is changing the mainstream of economics.