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Utilitarianism and unequal longevities : A remedy?

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  • LEROUX, Marie - Louise

    ()
    (CORE, Université catholique de Louvain, B-1348 Louvain-la-Neuve, Belgium)

  • PONTHIERE, Grégory

    ()
    (Ecole Normale Supérieure, Paris, and Paris School of Economics, F-75014 Paris, France)

Abstract

This paper re-examines a counterintuitive corollary of utilitarianism under unequal longevities: the tendency to redistribute resources from short-lived towards long-lived agents, against any intuition of compensation. It is shown that this corollary prevails not only under time-additive lifetime welfare, but, also, in general, under non-additive lifetime welfare, so that this counterintuitive redistributive corollary is a robust argument against utilitarianism. This paper studies a remedy to that counterintuitive corollary. This consists in imputing, when solving the social planner's problem, the consumption equivalent of a long life to the consumption of long- lived agents. We identify the conditions under which such a modified utilitarian optimum involves a compensation of short-lived agents with respect to the laissez-faire. That remedy is also applied to an economy with risky longevity, where short-lived agents are penalized not only by the limited opportunities to spread resources over time (due to a shorter life), but, also, by lost savings (due to unanticipated death).

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Bibliographic Info

Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2010043.

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Date of creation: 01 Jul 2010
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Handle: RePEc:cor:louvco:2010043

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Keywords: utilitarianism; differential longevity; compensation; redistribution; consumption equivalent;

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  1. Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthière, 2008. "Should we subsidize longevity?," PSE Working Papers halshs-00586236, HAL.
  2. LEROUX, Marie-Louise & PONTHIERE, Gregory, . "Optimal tax policy and expected longevity: a mean and variance utility approach," CORE Discussion Papers RP -2158, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. Belleflamme,Paul & Peitz,Martin, 2010. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9780521681599.
  4. LEROUX, Marie-Louise & PONTHIERE, Grégory, 2008. "Optimal tax policy and expected longevity: a mean and variance approach," CORE Discussion Papers 2008039, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. repec:pse:psecon:2008-46 is not listed on IDEAS
  6. Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthière, 2008. "Optimal linear taxation under endogenous longevity," PSE Working Papers halshs-00586241, HAL.
  7. Winfried Pohlmeier & Luc Bauwens & David Veredas, 2007. "High frequency financial econometrics. Recent developments," ULB Institutional Repository 2013/136223, ULB -- Universite Libre de Bruxelles.
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Cited by:
  1. repec:hal:wpaper:halshs-00564934 is not listed on IDEAS
  2. Pierre Pestieau & Grégory Ponthière, 2012. "The public economics of increasing longevity," PSE Working Papers halshs-00676492, HAL.
  3. repec:hal:wpaper:halshs-00676492 is not listed on IDEAS

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