Reconciling the Rawlsian and the utilitarian approaches to the maximization of social welfare

Under a deadweight loss of tax and transfer, there is tension between the optimal policy choices of a Rawlsian social planner and a utilitarian social planner. However, when with a weight greater than a certain critical value the individuals’ utility functions incorporate distaste for low relative income, a utilitarian will select exactly the same income distribution as a Rawlsian.

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Year of publication:	2014
Authors:	Stark, Oded ; Jakubek, Marcin ; Falniowski, Fryderyk
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 122.2014, 3, p. 439-444
Publisher:	Elsevier
Subject:	Maximization of social welfare \| Rawlsian social welfare function \| Utilitarian social welfare function \| Deadweight loss \| Distaste for low relative income

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Type of publication:	Article
Classification:	D31 - Personal Income, Wealth and Their Distributions ; D60 - Welfare Economics. General ; H21 - Efficiency; Optimal Taxation ; I38 - Government Policy; Provision and Effects of Welfare Programs
Source:	RePEc - Research Papers in Economics

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