Towards a Utilitarian Social Welfare Function¡ªIncome Inequality and National Welfare Growth in China

Songtao Wang, Bin Li and Tristan Kenderdine
Authors registered in the RePEc Author Service: 宋涛 王 ()

Research in World Economy, 2019, vol. 10, issue 3, 344-358

Abstract: Since the beginning of the reform period, China's income inequality has increased. However, loss of national welfare and the impact of income inequality on the growth of national welfare has not been adequately assessed. The result is that any development model myopically focusing on efficiency and ignoring equality cannot maximize growth in national welfare. Grounded in utilitarian theory, this paper builds a national welfare function which incorporates the Gini coefficient and demonstrates the negative effects of income inequality on China¡¯s national welfare. We then provide a welfare-loss formula of income inequality and another formula to calculate the influence of income inequality change on national welfare growth. Our calculations show that from 1996 to 2010, the average welfare-loss rate of China¡¯s residents' income inequality was 8.08%, with absolute welfare loss increasing1.44 times; while the relative impact of Gini coefficient increases on national welfare growth was (-) 8.66%.

Keywords: income inequality, Gini Coefficient, national welfare growth, utilitarianism; welfare economics (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciedu.ca/journal/index.php/rwe/article/view/16854/10460 (application/pdf)
http://www.sciedu.ca/journal/index.php/rwe/article/view/16854 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jfr:rwe111:v:10:y:2019:i:3:p:344-358

DOI: 10.5430/rwe.v10n3p344

Access Statistics for this article

Research in World Economy is currently edited by Gina Perry

More articles in Research in World Economy from Research in World Economy, Sciedu Press
Bibliographic data for series maintained by Gina Perry ().