Construction of a social welfare function under consideration of conditional self-interest

2021 ◽  
Vol 6 (3) ◽  
pp. 263
Author(s):  
Sabine Spangenberg ◽  
David M. Munyinyi
Author(s):  
Roy Germano

Remittances sent by international migrants have become an increasingly important source of social welfare in the developing world. This chapter explores what remittances are, why migrants send them, and how poor families use them. I argue in this chapter that remittances are more than just gifts from one relative to another. They play a larger social welfare role that complements funds that governments spend on social welfare programs. This social welfare function has become particularly important in recent decades as developing countries have prioritized austerity and integrated into volatile global markets. I argue that by filling a welfare gap in an age of austerity, remittances help to reduce the suffering and anger that so often trigger political and social instability during times of economic crisis.


Author(s):  
Caroline J. Jagtenberg ◽  
Maaike A. J. Vollebergh ◽  
Oddvar Uleberg ◽  
Jo Røislien

Abstract Background A primary task of the Norwegian helicopter emergency medical services (HEMS) is to provide advanced medical care to the critical ill and injured outside of hospitals. Where HEMS bases are located, directly influences who in the population can be reached within a given response time threshold and who cannot. When studying the locations of bases, the focus is often on efficiency, that is, maximizing the total number of people that can be reached within a given set time. This approach is known to benefit people living in densely populated areas, such as cities, over people living in remote areas. The most efficient solution is thus typically not necessarily a fair one. This study aims to incorporate fairness in finding optimal air ambulance base locations. Methods We solve multiple advanced mathematical optimization models to determine optimal helicopter base locations, with different optimization criteria related to the level of aversion to inequality, including the utilitarian, Bernoulli-Nash and iso-elastic social welfare functions. This is the first study to use the latter social welfare function for HEMS. Results Focusing on efficiency, a utilitarian objective function focuses on covering the larger cities in Norway, leaving parts of Norway largely uncovered. Including fairness by rather using an iso-elastic social welfare function in the optimization avoids leaving whole areas uncovered and in particular increases service levels in the north of Norway. Conclusions Including fairness in determining optimal HEMS base locations has great impact on population coverage, in particular when the number of base locations is not enough to give full coverage of the country. As results differ depending on the mathematical objective, the work shows the importance of not only looking for optimal solutions, but also raising the essential question of ‘optimal with respect to what’.


Author(s):  
Louis Kaplow

Abstract Optimal policy rules—including those regarding income taxation, commodity taxation, public goods, and externalities—are typically derived in models with homogeneous preferences. This article reconsiders many central results for the case in which preferences for commodities, public goods, and externalities are heterogeneous. When preference differences are observable, standard second-best results in basic settings are unaffected, except those for the optimal income tax. Optimal levels of income taxation may be higher, the same, or lower on types who derive more utility from various goods, depending on the nature of preference differences and the concavity of the social welfare function. When preference differences are unobservable, all policy rules may change. The determinants of even the direction of optimal rule adjustments are many and subtle.


2009 ◽  
Vol 33 (3) ◽  
pp. 415-421 ◽  
Author(s):  
Lee R. Gibson ◽  
Robert C. Powers

2017 ◽  
Vol 14 (3) ◽  
Author(s):  
Marco Fabbri ◽  
Diogo GC Britto

Abstract This paper proposes a quantitative approach to study two methodological problems arising when a costly redistribution of resources is implemented through public policies or legal rules: (a) aggregating individual into social preferences and (b) choosing the object of maximization. We consider a redistribution intervention that reduces inequality but diminishes total wealth and we specify a set of social welfare functions combining different preferences aggregation methods and maximands. For each social welfare function, we calculate its “price of equity”, defined as the maximum fraction of total wealth that a society is willing to sacrifice in order to implement the redistribution. Comparing the prices for equity across different social welfare function specifications, we identify systematic relationships and we rank them according to the efficiency-equity orientation. Results show that social welfare functions characterized by aggregation methods conventionally considered equity-oriented may reject redistribution interventions that are evaluated as welfare-improving by social welfare functions using efficiency-oriented aggregation methods. Similarly, social welfare functions considered equity-oriented because using utility as object of maximization may reject distributive policies that are evaluated as welfare-improving by social welfare functions using wealth as maximand. We argue that the quantitative approach proposed, by expounding the trade-off between equity and efficiency connected to different social welfare functions, may prove useful in areas of public law where policy-makers have to engage in the choice of a normative criterion for the evaluation of social welfare. Additionally, our results may inform rule-makers interested in comparing the distributive effects of alternative legal rules in special circumstances where private remedies can efficiently achieve redistribution goals.


2019 ◽  
Vol 35 (3) ◽  
pp. 368-395 ◽  
Author(s):  
Thomas McGregor ◽  
Brock Smith ◽  
Samuel Wills

Abstract Inequality is important, both for its own sake and for its political, social, and economic implications. However, measuring inequality is not straightforward, as it requires decisions to be made on the variable, population, and distributional characteristics of interest. These decisions will naturally influence the conclusions that are drawn so they must be closely linked to an underlying purpose, which is ultimately defined by a social welfare function. This paper outlines important considerations when making each of these decisions, before surveying recent advances in measuring inequality and suggesting avenues for future work.


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