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Book part
Publication date: 6 July 2007

Paul D. Thistle

For over 60 years, Lerner's (1944) probabilistic approach to the welfare evaluation of income distributions has aroused controversy. Lerner's famous theorem is that, under…

Abstract

For over 60 years, Lerner's (1944) probabilistic approach to the welfare evaluation of income distributions has aroused controversy. Lerner's famous theorem is that, under ignorance regarding who has which utility function, the optimal distribution of income is completely equal. However, Lerner's probabilistic approach can only be applied to compare distributions with equal means when the number of possible utility functions equals the number of individuals in the population. Lerner's most controversial assumption that each assignment of utility functions to individuals is equally likely. This paper generalizes Lerner's probabilistic approach to the welfare analysis of income distributions by weakening the restrictions of utilitarian welfare, equal means, equal numbers, and equal probabilities and a homogeneous population. We show there is a tradeoff between invariance (measurability and comparability) and the information about the assignment of utility functions to individuals required to evaluate expected social welfare.

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Equity
Type: Book
ISBN: 978-0-7623-1450-8

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Book part
Publication date: 10 August 2010

Gordon Burt

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…

Abstract

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’.

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Conflict, Complexity and Mathematical Social Science
Type: Book
ISBN: 978-1-84950-973-2

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Book part
Publication date: 16 November 2016

Oded Stark and Marcin Jakubek

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…

Abstract

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.

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Book part
Publication date: 19 July 2000

R. A. de Mooij

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Environmental Taxation and the Double Dividend
Type: Book
ISBN: 978-1-84950-848-3

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Book part
Publication date: 20 May 2003

Jean-Yves Duclos, Vincent Jalbert and Abdelkrim Araar

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely…

Abstract

The last 20 years have seen a significant evolution in the literature on horizontal inequity (HI) and have generated two major and “rival” methodological strands, namely, classical HI and reranking. We propose in this paper a class of ethically flexible tools that integrate these two strands. This is achieved using a measure of inequality that merges the well-known Gini coefficient and Atkinson indices, and that allows a decomposition of the total redistributive effect of taxes and transfers into a vertical equity effect and a loss of redistribution due to either classical HI or reranking. An inequality-change approach and a money-metric cost-of-inequality approach are developed. The latter approach makes aggregate classical HI decomposable across groups. As in recent work, equals are identified through a non-parametric estimation of the joint density of gross and net incomes. An illustration using Canadian data from 1981 to 1994 shows a substantial, and increasing, robust erosion of redistribution attributable both to classical HI and to reranking, but does not reveal which of reranking or classical HI is more important since this requires a judgement that is fundamentally normative in nature.

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Fiscal Policy, Inequality and Welfare
Type: Book
ISBN: 978-1-84950-212-2

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Article
Publication date: 15 November 2018

Wu Fuxiang and Cai Yue

At present, China’s industrial spatial layout faces the predicament of over-agglomeration of Eastern China industries and the near disintegration of industrial structure…

Abstract

Purpose

At present, China’s industrial spatial layout faces the predicament of over-agglomeration of Eastern China industries and the near disintegration of industrial structure in the central and western regions. The paper aims to discuss this issue.

Design/methodology/approach

Based on the perspective of differentiated inter-regional labor mobility, this paper constructed a model framework of quadratic sub-utility quasi-linear preference utility function, and conducted model deduction and numerical simulation on causal factors of this spatial imbalance along the two dimensions of individual and regional welfare.

Findings

The study finds that in the long run, industrial spatial layout imposes a certain threshold limit on the portfolio proportion of differentiated labor. The dilemma of China’s industrial spatial layout is attributable to the deviation of the market’s optimal agglomeration from the social optimal agglomeration, and to the disfunction of Eastern China’s role as an intermediary between the global and the domestic value chain.

Originality/value

To resolve this predicament of industrial layout, the unitary welfare compensation based on fiscal transfer payment has to be switched to a more comprehensive approach giving consideration to industrial rebalancing.

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China Political Economy, vol. 1 no. 2
Type: Research Article
ISSN: 2516-1652

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Article
Publication date: 1 February 1995

Masudul Alam Choudhury

Explains the exogenous and endogenous types of relationshipsbetween ethics and economics in neoclassical and non‐neoclassicalframework. Studies market consequentialism…

Abstract

Explains the exogenous and endogenous types of relationships between ethics and economics in neoclassical and non‐neoclassical framework. Studies market consequentialism, deontological preferences and polity‐market (ecology) interactions in recent developments in economic theory and political philosophy. A review of literature is covered. From these studies, bordering ethics and economics, is evolved the contrasting methodology and world view of an endogenous theory underlying the interface between ethics and economics. The underlying principle of ethical endogeneity of this new paradigm is treated with an institution‐economy interface by addressing the issue of sustainability. A simple mathematical formulation is done to show how ethics can be methodologically endogenized in a scientific framework for theory, policy development and institutionalism. Examines Canada′s Green Plan in light of the exogenous and endogenous ethical relationships. The critique is developed and ethico‐economic policy‐theory alternatives are proposed.

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International Journal of Social Economics, vol. 22 no. 2
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 1 March 1995

Masudul Alam Choudhury

The exogenous and endogenous types of relationships between ethicsand economics are explained in neoclassical and non‐neoclassicalframeworks. Market consequentialism…

Abstract

The exogenous and endogenous types of relationships between ethics and economics are explained in neoclassical and non‐neoclassical frameworks. Market consequentialism, deontological preferences and polity‐market (ecology) interactions are brought out to configure the theoretical perspectives of the endogenous theory underlying the interface between ethics and economics. The principle of ethical endeogeneity is treated in an institution‐economy interface by addressing the issue of sustainability. In this respect a simple mathematical formulation is done to show how ethics can be endogenized in a scientific framework for theory, policy development and institutionalism. Critically examines Canada′s Green Plan in light of the exogenous and endogenous ethical relationships. Develops the critique and proposes ethico‐economic policy‐theoretic alternatives.

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International Journal of Social Economics, vol. 22 no. 3
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 19 January 2005

Stephen Sheppard

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Urban Dynamics and Growth: Advances in Urban Economics
Type: Book
ISBN: 978-0-44451-481-3

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Book part
Publication date: 6 August 2018

Eliav Danziger and Leif Danziger

This chapter analyzes the effects of introducing a graduated minimum wage in a model with optimal income taxation in which a government seeks to maximize social welfare

Abstract

This chapter analyzes the effects of introducing a graduated minimum wage in a model with optimal income taxation in which a government seeks to maximize social welfare. It shows that the optimal graduated minimum wage increases social welfare by increasing the low-productivity workers’ consumption and bringing it closer to the first-best. The chapter also describes how the graduated minimum wage in a social welfare optimum depends on important economy characteristics such as the government’s revenue needs, the social welfare weight of low-productivity workers, and the numbers and productivities of the different types of workers.

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Transitions through the Labor Market
Type: Book
ISBN: 978-1-78756-462-6

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