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Social Welfare Orderings: A Life-Cycle Perspective

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  • Ramses H. Abul Naga

Abstract

Life-cycle theories emphasize the fact that consumption is allocated intertemporally, on the basis of a long-term concept of resources that differs from household income. Because life-cycle income is unobserved, the distribution of this variable cannot be recovered. It is shown that, within a suitably defined class, a predictor of life-cycle income based on household income and expenditure entails a distribution dominated in a social welfare sense by the distribution of life-cycle incomes. A predictor constructed from socio-demographic variables induces a distribution that welfare-dominates the distribution of life-cycle incomes. Copyright (c) The London School of Economics and Political Science 2005.

Suggested Citation

  • Ramses H. Abul Naga, 2005. "Social Welfare Orderings: A Life-Cycle Perspective," Economica, London School of Economics and Political Science, vol. 72(3), pages 497-514, August.
  • Handle: RePEc:bla:econom:v:72:y:2005:i:3:p:497-514
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Riccardo Massari, 2005. "A Measure of Welfare Based on Permanent Income Hypothesis: An Application on Italian Households Budgets," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 64(1), pages 55-92, September.
    2. Gian Maria Tomat, 2007. "Revisiting poverty and welfare dominance," Temi di discussione (Economic working papers) 651, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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