Inequality averse criteria for evaluating infinite utility streams: The impossibility of Weak Pareto

Alcantud, José Carlos R. (2010): Inequality averse criteria for evaluating infinite utility streams: The impossibility of Weak Pareto.

Abstract

This paper investigates ethical aggregation of infinite utility streams by representable social welfare relations. We prove that the Hammond Equity postulate and other variations of it like the Pigou-Dalton transfer principle are incompatible with positive responsiveness to welfare improvements by every generation. The case of Hammond Equity for the Future is investigated too.

• Item Type: MPRA Paper
• Language: English
• Keywords: Social welfare function; Equity; Inequality aversion; Pareto axiom; Intergenerational justice
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making > D71 - Social Choice ; Clubs ; Committees ; Associations; D - Microeconomics > D6 - Welfare Economics > D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement; D - Microeconomics > D9 - Intertemporal Choice > D90 - General

References

Alcantud, J.C.R. and Garcia-Sanz, M.D. (2010): Paretian evaluation of infinite utility streams: an egalitarian criterion. Economics Letters 106, 209-211.

Alcantud, J.C.R. and Garc\'\i a-Sanz, M.D. (2010): Evaluations of infinite utility streams: Pareto-efficient and egalitarian axiomatics. MPRA Paper No. 20133, http://mpra.ub.uni-muenchen.de/20133/

Asheim, G. B., Mitra, T. and Tungodden, B. (2010): Sustainable recursive social welfare functions. Economic Theory, forthcoming.

Asheim, G. B. and Tungodden, B. (2004a): Do Koopmans' postulates lead to discounted utilitarianism?. Discussion paper 32/04, Norwegian School of Economics and Business Administration.

Banerjee, K. (2006): On the equity-efficiency trade off in aggregating infinite utility streams. Economics Letters 93, 63-67.

Basu, K. and Mitra, T. (2003): Aggregating infinite utility streams with intergenerational equity: The impossibility of being Paretian. Econometrica 71, 1557-1563.

Basu, K. and Mitra, T. (2007): Possibility theorems for equitably aggregating infinite utility streams. In: Roemer, J., Suzumura, K. (Eds.), Intergenerational Equity and Sustainability: Conference Proceedings of the IWEA Roundtable Meeting on Intergenerational Equity (Palgrave).

Bossert, W., Sprumont, Y. and Suzumura, K. (2007): Ordering infinite utility streams. Journal of Economic Theory 135, 579-589.

Koopmans, T.C. (1960): Stationary ordinal utility and impatience. Econometrica 28, 287-309.

Hara, C., Shinotsuka, T., Suzumura, K. and Xu, Y. (2008): Continuity and egalitarianism in the evaluation of infinite utility streams. Social Choice and Welfare 31, 179-191.

Sakai, T. (2006): Equitable intergenerational preferences on restricted domains. Social Choice and Welfare 27, 41-54.