What is the public’s social welfare function?

Richard Layard and Ekaterina Oparina

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Optimal public policy requires a social welfare function defined over individual utilities. While there is substantial research on income-based social welfare functions, no published study has directly elicited public preferences over utility when measured by subjective wellbeing. Using a novel survey instrument with a representative UK sample (N=2,068), we estimate the public's social welfare function for life satisfaction. We find significant aversion to wellbeing inequality, with a median isoelastic parameter of 0.48. This implies a social welfare function approximately equal to the sum of square roots of individual utilities. The median respondent values improving the wellbeing of the least satisfied by one unit roughly twice as much as improving the most satisfied by one unit. Our findings provide ethically grounded distributional weights for wellbeing policy evaluation and cost-benefit analysis.

Keywords: social welfare function; inequality aversion; wellbeing; life satisfaction; distributional weights (search for similar items in EconPapers)
Date: 2026-06-03
New Economics Papers: this item is included in nep-ltv
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