Foundations of Weighted Utilitarianism

Abstract

We provide a microfoundation for a weighted utilitarian social welfare function that reflects common moral intuitions about interpersonal comparisons of utilities. If utility is only ordinal, interpersonal comparisons are meaningless. Nonetheless, economics often adopts utilitarian welfare functions, assuming that comparable utility functions can be calibrated using information beyond consumer choice data. We show that consumer choice data alone are sufficient. As suggested by Edgeworth (1881), just noticeable differences provide a common unit of measure for interpersonal comparisons of utility differences. We prove that a simple monotonicity axiom implies a weighted utilitarian aggregation of preferences, with weights proportional to individual jnd's.