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:	2014-01-24
Authors:	Stark, Oded ; Jakubek, Marcin ; Falniowski, Fryderyk
Institutions:	Zentrum für Entwicklungsforschung (ZEF), Rheinische Friedrich-Wilhelms-Universität Bonn
Subject:	Maximization of social welfare \| Rawlsian social welfare function \| Utilitarian social welfare function \| Deadweight loss \| Distaste for low relative income \| Institutional and Behavioral Economics \| Labor and Human Capital

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Extent:	application/pdf
Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	The text is part of a series Center for Development Research (ZEF)>Discussion Papers Number 162881
Source:	RePEc - Research Papers in Economics

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