Axiomatic characterization of aggregate consumer surplus measures as social welfare indices
AbstractThis paper proposes two types of equity-regarding social welfare indices which satisfy the Pigu-Dalton transfer principle in the neoclassical market model: one is the geometrically aggregated compensating ratios and the other is the geometrically aggregated equivalent ratios. The two proposed indices, as well as the well-known two types of arithmetically aggregated Hicksian variations, are used to define Arrovian social ordering functions which evaluate the price vectors and income distributions in the market model. It is shown that each of the four Arrovian social ordering functions can be characterized by the axioms in Arrovian form: Pareto, symmetry and an independence axiom weaker than Arrow's original independence axiom. It follows from the characterizations that the two proposed indices have solid normative foundations as social welfare indices even if the individual heterogeneity both in tastes and in incomes is admitted, and that the equity-regarding property of the indices comes from their respective independence axioms(variants of Fisher's commensurability axiom).
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Graduate School of Economics and Management, Tohoku University in its series TERG Discussion Papers with number 294.
Length: 44 pages
Date of creation: Apr 2013
Date of revision:
Contact details of provider:
Postal: Kawauchi, Aoba-ku, Sendai 980-8476
Web page: http://www.econ.tohoku.ac.jp/econ/english/index.html
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tohoku University Library).
If references are entirely missing, you can add them using this form.