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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 Tuebingen, Faculty of Economics and Social Sciences in its series University of Tuebingen Working Papers in Economics and Finance with number 21.

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Date of creation: 2011
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Handle: RePEc:zbw:tuewef:21

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Keywords: utilitarianism; income equality; social welfare maximization; relative income;

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References

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  1. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May.
  2. Blanchflower, David G. & Oswald, Andrew J., 2007. "Hypertension and Happiness across Nations," IZA Discussion Papers 2633, Institute for the Study of Labor (IZA).
  3. Erzo F.P. Luttmer, 2004. "Neighbors as Negatives: Relative Earnings and Well-Being," NBER Working Papers 10667, 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. Stark, Oded & Hyll, Walter, 2011. "On the economic architecture of the workplace: Repercussions of social comparisons among heterogeneous workers," MPRA Paper 28910, University Library of Munich, Germany.
  6. Andrew POSTLEWAITE, 2001. "Social Arrangements and Economic Behavior," Annales d'Economie et de Statistique, ENSAE, issue 63-64, pages 67-87.
  7. Stark, Oded & Hyll, Walter, 2010. "Endogenous Selection of Comparison Groups, Human Capital Formation, and Tax Policy," MPRA Paper 28909, University Library of Munich, Germany.
  8. Stark, Oded & Fan, C. Simon, 2009. "A Theory of Migration as a Response to Occupational Stigma," Discussion Papers 55363, University of Bonn, Center for Development Research (ZEF).
  9. Zizzo, D.J. & Oswald, A., 2000. "Are People Willing to Pay to Reduce Others' Incomes?," The Warwick Economics Research Paper Series (TWERPS) 568, University of Warwick, Department of Economics.
  10. 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.
  11. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
  12. Stark, Oded & Fan, C. Simon, 2010. "Migration for degrading work as an escape from humiliation," MPRA Paper 28905, University Library of Munich, Germany.
  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. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
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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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