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A Generalised Social Welfare Function and its Disaggregation by Components of Income: The Method and Application

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Author Info
Pundarik Mukhopadhaya () (National University of Singapore)

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Abstract

The Social Welfare Function (SWF) is a decision rule to rank alternative social states in a complete fashion in terms of social welfare. This paper questions the philosophy of Paretian Principle as a desirable property of the SWF. It shows that it is possible to generalize the widely used Sen SWF, which can be non-Paretian under special circumstances. Also, it demonstrates the disaggregation method of this SWF by components of income using the Gini decomposition process. The method is applied to Australian Household Expenditure Survey data to estimate the trend of welfare of total income and its components in Australia from 1984 to 1993-94.

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File URL: http://www.fas.nus.edu.sg/ecs/pub/wp/wp0121.pdf
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Publisher Info
Paper provided by National University of Singapore, Department of Economics in its series Departmental Working Papers with number wp0121.

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Length: 20 pages
Date of creation: 2001
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Handle: RePEc:nus:nusewp:wp0121

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Related research
Keywords: Social Welfare Function Paretian Gini Concentration Coefficient Relative equity

Find related papers by JEL classification:
D39 - Microeconomics - - Distribution - - - Other
D69 - Microeconomics - - Welfare Economics - - - Other

References listed on IDEAS
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  1. Sen, Amartya K, 1976. "Real National Income," Review of Economic Studies, Blackwell Publishing, vol. 43(1), pages 19-39, February. [Downloadable!] (restricted)
  2. Yitzhaki, Shlomo, 1982. "Relative deprivation and economic welfare," European Economic Review, Elsevier, vol. 17(1), pages 99-113. [Downloadable!] (restricted)
  3. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May. [Downloadable!] (restricted)
  4. Sheshinski, Eytan, 1972. "Relation between a social welfare function and the gini index of income inequality," Journal of Economic Theory, Elsevier, vol. 4(1), pages 98-100, February. [Downloadable!] (restricted)
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This page was last updated on 2008-11-15.

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