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Welfare as Simple(x) Equity Equivalents

Loïc Berger and Johannes Emmerling

No 2017.14, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Inequity plays a fundamental role in the evaluation of social welfare in many dimensions. We revisit the concept of inequity, whether across states of world (uncertainty), across individuals (inequality) and across generations (intergenerational equity), using a common framework generalizing the discounted expected utilitarianism approach. We propose a general measure of welfare as equity equivalents and develop the corresponding inequity index. We then allow for different degrees of inequity aversion across the three dimensions to span a simplex of possible inequity preferences and relate it to the recent literature on this topic. We show that the ordering of aggregation across the different dimensions matters for welfare evaluations and that many welfare-theoretical approaches developed in the literature may be seen as special cases of this general framework.

Keywords: Utilitarianism; Inequality; Inequity Aversion; Risk Aversion; Intertemporal Welfare; Discounting (search for similar items in EconPapers)
JEL-codes: D60 D63 D30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic and nep-upt
Date: 2017-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

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