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A concern about low relative income, and the alignment of utilitarianism with egalitarianism

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  • Stark, Oded
  • Kobus, Martyna
  • Jakubek, Marcin

Abstract

A utilitarian social planner who maximizes social welfare assigns the available income to those who are most efficient in converting income into utility. However, when individuals are concerned about their income falling behind the incomes of others, the optimal income distribution under utilitarianism is equality of incomes.

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Bibliographic Info

Paper provided by University of Bonn, Center for Development Research (ZEF) in its series Discussion Papers with number 117257.

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Date of creation: Oct 2011
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Handle: RePEc:ags:ubzefd:117257

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Related research

Keywords: Utilitarianism; Income equality; Social welfare maximization; Relative income; Labor and Human Capital; H0; I0; I30; I31;

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  1. Luttmer, Erzo F. P., 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," Working Paper Series rwp04-029, Harvard University, John F. Kennedy School of Government.
  2. C. Simon Fan & Oded Stark, 2011. "A Theory Of Migration As A Response To Occupational Stigma," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 549-571, 05.
  3. David G. Blanchflower & Andrew J. Oswald, 2007. "Hypertension and Happiness across Nations," NBER Working Papers 12934, National Bureau of Economic Research, Inc.
  4. Tinbergen, Jan, 1970. "A Positive and a Normative Theory of Income Distribution," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 16(3), pages 221-34, September.
  5. Hyll, Walter & Stark, Oded, 2011. "On the economic architecture of the workplace: repercussions of social comparisons amongst heterogeneous workers," University of Tuebingen Working Papers in Economics and Finance 6, University of Tuebingen, Faculty of Economics and Social Sciences.
  6. Daniel J. ZIZZO & Andrew J. OSWALD, 2001. "Are People Willing to Pay to Reduce Others'Incomes?," Annales d'Economie et de Statistique, ENSAE, issue 63-64, pages 39-65.
  7. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, vol. 101(408), pages 1163-78, September.
  8. Stark, Oded & Fan, C. Simon, 2010. "Migration for degrading work as an escape from humiliation," MPRA Paper 28905, University Library of Munich, Germany.
  9. Oded Stark & Walter Hyll & Yong Wang, 2012. "Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy," Economica, London School of Economics and Political Science, vol. 79(313), pages 62-75, 01.
  10. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May.
  11. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
  12. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
  13. Stark, Oded, 2010. "Looking at the Integration of Nations through the Lens of the Merger of Populations: Preliminary Superadditivity and Impossibility Results," MPRA Paper 28701, University Library of Munich, Germany.
  14. Andrew POSTLEWAITE, 2001. "Social Arrangements and Economic Behavior," Annales d'Economie et de Statistique, ENSAE, issue 63-64, pages 67-87.
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Cited by:
  1. Stark, Oded, 2013. "On the economics of others," University of Tuebingen Working Papers in Economics and Finance 62, University of Tuebingen, Faculty of Economics and Social Sciences.

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