Utilitarianism and unequal longevities: A remedy?

Marie-Louise Leroux and Gregory Ponthiere ()

PSE Working Papers from PSE (Ecole normale supérieure)

Abstract: Classical utilitarianism, if coupled with standard assumptions such as the expected utility hypothesis and additive lifetime welfare, has the undesirable corollary to recommend a redistribution of resources from short-lived to long-lived agents, against any intuition of compensation. This paper proposes a remedy to that undesirable property of utilitarianism. This remedy consists in imputing, when solving the social planner's problem, the consumption equivalent of a long life to the consumption of long-lived agents. Provided the consumption equivalent is positive, the modified first-best problem exhibits a compensation of short-lived agents, under the form of a higher consumption. Then, in a general framework where agents differ in survival prospects, we compare the ex ante remedy (compensating agents with a lower life expectancy) and the ex post remedy (compensating short-lived agents), and show their incompatibility.

New Economics Papers: this item is included in nep-hea and nep-upt
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:pse:psecon:2009-19

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