Economic disruptions generally create winners and losers. The compensation problem consists of designing a reform of the existing income tax system that offsets the welfare losses of the latter by redistributing the gains of the former. We derive a formula for the compensating tax reform and its...

Economic disruptions generally create winners and losers. The compensation problem consists of designing a reform of the existing income tax system that offsets the welfare losses of the latter by redistributing the gains of the former. We derive a formula for the compensating tax reform and its...

Economic disruptions generally create winners and losers. The compensation problem consists of designing a reform of the existing income tax system that offsets the welfare losses of the latter by redistributing the gains of the former. We derive a formula for the compensating tax reform and its...

Economic disruptions generally create winners and losers. The compensation problem consists of designing a reform of the existing income tax system that offsets the welfare losses of the latter by redistributing the gains of the former. We derive a formula for the compensating tax reform and its...

We generalize the classic concept of compensating variation and the welfare compensation principle to a general equilibrium environment with distortionary taxes. We show that the problem of designing a tax reform that compensates the welfare gains and losses induced by an economic disruption can...

We generalize the classic concept of compensating variation and the welfare compensation principle to a general equilibrium environment with distortionary taxes. We show that the problem of designing a tax reform that compensates the welfare gains and losses induced by an economic disruption can...

Economists have traditionally been interest in analyzing economic growth enhancing factors. Entrepreneurship is one of factors considered by economists. However, in this analysis is also necessary to be considered how economic progress and distributive justice are affected. Usually economic...

Economists have traditionally been interest in analyzing economic growth enhancing factors. Entrepreneurship is one of factors considered by economists. However, in this analysis is also necessary to be considered how economic progress and distributive justice are affected. Usually economic...

This paper shows that implicit assumptions about the numeraire good in the Kaldor-Hicks efficiency-equity analysis involve a "same-yardstick" fallacy (a fallacy pointed out by Paul Samuelson in another context). These results have negative implications for cost-benefit analysis, the...

One reason to call an activity a vice and suppress it is that it reduces a person's future happiness more than it increases his present happiness. Gruber & Koszegi (2001) show how a vice tax can increase a person's welfare in a model of multiple selves with hyperbolic preferences across time. An...

We consider an economy in which agents di¤er in terms of productivity (that may be either high or low) as well as in their preferences for labour. Individuals decide whether or not they enter the labour force. In this context and under asymmetric information, the optimal tax schedules derived...

This paper provides a welfare analysis of trade liberalization based upon the moral principles of utilitarianism. The history of the moral philosophy of utilitarianism is described including its introduction into what became known as Cambridge welfare economics. The differences between this...

The introduction of genetically modified (GM) crops in the mid 1990s appeared to be the latest in a string of technological innovations in agriculture. However, consumer resistance, particularly in Europe has limited the sector’s enthusiasm. One response to the limited enthusiasm has been the...

The introduction of genetically modified (GM) crops in the mid 1990s appeared to be the latest in a string of technological innovations in agriculture. However, consumer resistance, particularly in Europe has limited the sector’s enthusiasm. One response to the limited enthusiasm has been...

According to a common opinion in economic literature, the National Income Test provides a necessary condition for potential Pareto dominance. This paper demonstrates that this statement is true in pure-exchange economies, but, in general, false in production economies.

According to a common opinion in economic literature, the National Income Test provides a necessary condition for potential Pareto dominance. This paper demonstrates that this statement is true in pure-exchange economies, but, in general, false in production economies.

Recent work has clarified the welfare implications of the application of cost-effectiveness analysis to the allocation of health care. Although cost-effectiveness analysis shares many similarities with cost-benefit analysis, it did not develop as an outgrowth of neoclassical welfare economics....

Pareto is sometimes credited with an early formulation of the ill-fated Hicks or Kaldor principles of hypothetical compensation. The basis for this claim is Pareto's 1894 article "Il massimo di utilita dato dalla libera concorrenza." However in that paper Pareto argued to the contrary, that in...