Reconciling the Rawlsian and the utilitarian approaches to the maximization of social welfare

Oded Stark; Marcin Jakubek; Fryderyk Falniowski

doi:10.1016/j.econlet.2013.11.019

Reconciling the Rawlsian and the utilitarian approaches to the maximization of social welfare

Oded Stark, Marcin Jakubek, Fryderyk Falniowski

Research output: Contribution to journal › Article › peer-review

Abstract

Under a deadweight loss of tax and transfer, there is tension between the optimal policy choices of a Rawlsian social planner and a utilitarian social planner. However, when with a weight greater than a certain critical value the individuals' utility functions incorporate distaste for low relative income, a utilitarian will select exactly the same income distribution as a Rawlsian.

Original language	English
Pages (from-to)	439-444
Number of pages	6
Journal	Economics Letters
Volume	122
Issue number	3
DOIs	https://doi.org/10.1016/j.econlet.2013.11.019
State	Published - Mar 2014
Externally published	Yes

Keywords

Deadweight loss
Distaste for low relative income
Maximization of social welfare
Rawlsian social welfare function
Utilitarian social welfare function

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10.1016/j.econlet.2013.11.019

Cite this

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abstract = "Under a deadweight loss of tax and transfer, there is tension between the optimal policy choices of a Rawlsian social planner and a utilitarian social planner. However, when with a weight greater than a certain critical value the individuals' utility functions incorporate distaste for low relative income, a utilitarian will select exactly the same income distribution as a Rawlsian.",

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AB - Under a deadweight loss of tax and transfer, there is tension between the optimal policy choices of a Rawlsian social planner and a utilitarian social planner. However, when with a weight greater than a certain critical value the individuals' utility functions incorporate distaste for low relative income, a utilitarian will select exactly the same income distribution as a Rawlsian.

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KW - Utilitarian social welfare function

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Reconciling the Rawlsian and the utilitarian approaches to the maximization of social welfare

Abstract

Keywords

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