Form Of Social Welfare Function Research Articles

Distributional Comparisons Using the Gini Inequality Measure

AbstractThis article is aimed at undergraduate and graduate economics students, as well as public sector economists, who are interested in inequality measurement. It examines the use of the Gini inequality measure to compare income distributions. The implicit distributional value judgements are made explicit, via the use of a particular form of Social Welfare Function. Emphasis is given to the interpretation of changes in inequality.

Comparing Income Distributions Using Atkinson's Measure of Inequality

AbstractThis article is aimed at undergraduate and graduate economics students, and public sector economists, who are interested in inequality measurement. It examines the use of the Atkinson inequality measure to compare income distributions. A major feature of this measure is that distributional value judgements are made explicit, via the use of a particular form of social welfare function. Emphasis is given to the interpretation of changes in inequality and the role of the relative inequality aversion parameter, which reflects an important feature of those value judgements.

Equilibrium and socially optimal strategies of a double-sided queueing system with two-mass point matching time

ABSTRACT We study a passenger-taxi double-ended queue with negative passengers and two-point matching time. The system considered in this paper is different from those studied in the existing literature, which fully explores the matching time between passengers and taxis, and the taxi capacity of the system. The objective is to get the equilibrium joining strategy and the socially optimal strategy under two information levels. For the practical consideration of the airport terminal scenario, two different information levels are investigated. The theoretical results show that the passenger utility function in the partially observable case is monotonic. For the complex form of social welfare function of the partially observable case, we use a split derivation. The equilibrium strategy and socially optimal strategy of the observable case are threshold-type. Furthermore, some representative numerical scenarios are used to visualize the theoretical results. The numerical scenarios illustrate the influence of parameters on the equilibrium strategy and socially optimal strategy under two information levels. Finally, the optimal social welfare for the two information levels with the same parameters is compared.

AN APPROXIMATION FOR THE OPTIMAL LINEAR INCOME TAX RATE

This paper derives a convenient method of calculating an approximation to the optimal tax rate in a linear income tax structure. Individuals are assumed to have Cobb‐Douglas preferences and the wage rate distribution is lognormal. First, the optimal tax rate is shown, for a general form of social welfare function, to be the smallest root of a quadratic equation involving a welfare‐weighted average wage rate. Second, an approximation to this average is derived for an isoelastic social welfare function. This average depends on the degree of inequality aversion of the welfare function and the coefficient on consumption in individuals' utility functions. Calculations show that the method performs well in comparison with standard simulation methods of computing the optimal tax rate.

Household Models: An Historical Perspective

This paper is a survey of the literature on theoretical models of the household, paying particular attention to some of the earlier contributions, and using them to place the current state of the theory in perspective. One of its aims is to suggest that the literature's neglect of Samuelson's proposal, that households can be modelled as if they maximised a form of social welfare function, was a mistake. However, the idea following directly from the Nash bargaining models, that the household's preference ordering over the utility profiles of its members depends on exogenous variables, in particular wage rates and non-wage incomes, is an important one. Combined with Samuelson's proposal, it can be made the basis for a general approach to modelling household decision taking, flexible enough to encompass non- cooperative behaviour and Pareto inefficiencies arising out of the inevitable incompleteness and unenforceability of domestic agreements. We also point out the importance of household production and some of the implications of its neglect in modelling households. Above all, the aim is to provide a deeper understanding of the current theoretical literature on household economics by means of a survey of its history.

Equity Measures and Their Performance in Transportation

This paper aims at equity implications of transportation policies by using a range of equity measures in two case studies. Different measures of inequality embrace different normative judgments. Early studies have warned about placing too much trust in a single measure. One approach is to address equity considerations by assuming an explicit form of social welfare function and the choice of a desired inequality aversion parameter. A second approach is to apply an inequality measure to a given pair of distributions of a variable (e.g., income and accessibility) that changes as the result of a policy. The latter approach is adopted in this paper. A partial equilibrium model of transportation is used for the calculation of the changes in income, accessibility, and the net benefit for different social groups. This paper demonstrates the challenges that arise in addressing equity with a partial equilibrium model of transportation. An overview of some equity measures and their properties is provided first. The performances of these equity measures are evaluated for alternative road pricing schemes for Oslo, Norway. The paper illustrates that relating the equity objective to a predefined value of any of these measures is not desirable. It is difficult to make a judgment about the equity implication of a policy on the basis of a single measure and without a thorough examination of several measures. The paper also shows that the sizes of the equity measures are quite sensitive to the level of spatial disaggregation.

Equity Measures and Their Performance in Transportation

This paper aims at equity implications of transportation policies by using a range of equity measures in two case studies. Different measures of inequality embrace different normative judgments. Early studies have warned about placing too much trust in a single measure. One approach is to address equity considerations by assuming an explicit form of social welfare function and the choice of a desired inequality aversion parameter. A second approach is to apply an inequality measure to a given pair of distributions of a variable (e.g., income and accessibility) that changes as the result of a policy. The latter approach is adopted in this paper. A partial equilibrium model of transportation is used for the calculation of the changes in income, accessibility, and the net benefit for different social groups. This paper demonstrates the challenges that arise in addressing equity with a partial equilibrium model of transportation. An overview of some equity measures and their properties is provided first. The ...

Accidents of Birth, Life Chances and the Impartial Observer

We confront two common objections to Harsanyi's impartial observer theorem; one to do with 'fairness', and the other to do with different individuals' having different attitudes toward risk. Both these objections can be accommodated if we drop the reduction axiom; in particular, if we distinguish between 'accidents of birth' and real-world 'life chances'. We do not drop the independence axiom that has often been seen as the source of these problems. Just as Harsanyi's theorem yields a utilitarian form of social welfare function, so our approach axiomatizes a generalized utilitarian form. If in addition, welfare is cardinally measurable, then we can interpret the shape of our generalized utilitarian functional form in terms of attitudes toward risk and toward interim inequality.