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Utilitarianism and unequal longevities: A remedy?

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  • Grégory Ponthière

    (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales [EHESS] - Ecole des Ponts ParisTech - Ecole normale supérieure de Paris - ENS Paris, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

  • Marie-Louise Leroux

    (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique)

Abstract

Classical utilitarianism, if coupled with standard assumptions such as the expected utility hypothesis and additive lifetime welfare, has the undesirable corollary to recommend a redistribution of resources from short-lived to long-lived agents, against any intuition of compensation. This paper proposes a remedy to that undesirable property of utilitarianism. This remedy consists in imputing, when solving the social planner's problem, the consumption equivalent of a long life to the consumption of long-lived agents. Provided the consumption equivalent is positive, the modified first-best problem exhibits a compensation of short-lived agents, under the form of a higher consumption. Then, in a general framework where agents differ in survival prospects, we compare the ex ante remedy (compensating agents with a lower life expectancy) and the ex post remedy (compensating short-lived agents), and show their incompatibility.

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Bibliographic Info

Paper provided by HAL in its series PSE Working Papers with number halshs-00566858.

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Date of creation: Jul 2009
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Handle: RePEc:hal:psewpa:halshs-00566858

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00566858
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Related research

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

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References

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  1. repec:ulb:ulbeco:2013/6500 is not listed on IDEAS
  2. Winfried Pohlmeier & Luc Bauwens & David Veredas, 2007. "High frequency financial econometrics. Recent developments," ULB Institutional Repository 2013/136223, ULB -- Universite Libre de Bruxelles.
  3. Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthière, 2008. "Should we subsidize longevity?," PSE Working Papers halshs-00586236, HAL.
  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. Belleflamme,Paul & Peitz,Martin, 2010. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9780521681599.
  6. Marie-Louise Leroux & Pierre Pestieau & Grégory Ponthière, 2008. "Optimal linear taxation under endogenous longevity," PSE Working Papers halshs-00586241, HAL.
  7. Marie-Louise Leroux & Grégory Ponthière, 2008. "Optimal tax policy and expected longevity: A mean and variance utility approach," PSE Working Papers halshs-00586247, HAL.
  8. repec:pse:psecon:2008-46 is not listed on IDEAS
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Citations

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Cited by:
  1. Pierre Pestieau & Gregory Ponthiere, 2012. "The Public Economics of Increasing Longevity," Hacienda Pública Española, IEF, vol. 200(1), pages 41-74, March.
  2. Pierre Pestieau & Grégory Ponthière, 2012. "The public economics of increasing longevity," Working Papers halshs-00676492, HAL.
  3. Marie-Louise Leroux & Grégory Ponthière & Marc Fleurbaey, 2010. "Compensating the dead? Yes we can!," Working Papers halshs-00564934, HAL.

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