Real National Income and Some Principles of Aggregation.

In this paper, the beginnings of a new approach to the theory of aggregation are developed. The basic idea is that aggregation should involve two things: (a) data over which social preferences are defined should be mapped into a smaller-dimensional space, and (b) there should exist an ordering on that lower-dimensional space such that an improvement in this criterion implies an improvement from any of a class of Social Welfare Functions and of a class of individual preference relations defined over the original space. Results are developed which show that this conception of aggregation can yield meaningful results; particularly with respect to comparisons of ‘real national income’ in two situations, for a given economy.