Welfare Assessments with Heterogeneous Individuals

Eduardo Davila and Andreas Schaab

No 30571, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a new approach to make welfare assessments based on the notion of Dynamic Stochastic weights (DS-weights for short). For a large class of dynamic stochastic economies with heterogeneous individuals, we introduce an aggregate additive decomposition that satisfies desirable properties and that allows us to exactly decompose welfare assessments into four components: i) aggregate efficiency, ii) risk-sharing, iii) intertemporal-sharing, and iv) redistribution. We leverage DS-weights to i) revisit how welfarist (e.g., utilitarian) planners make interpersonal welfare comparisons and ii) formalize new welfare criteria that are exclusively based on one or several of the components that we identify.

JEL-codes: D60 E61 (search for similar items in EconPapers)
Date: 2022-10
New Economics Papers: this item is included in nep-dge
Note: AP EFG ME PE
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.nber.org/papers/w30571.pdf (application/pdf)

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:nbr:nberwo:30571

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w30571

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().