Pollution, décès prématuré et compensation

We study the compensation of prematurely dead persons in an economy where production generates pollution, and where pollution deteriorates survival conditions once it reaches some threshold. For that purpose, we characterize the ex post egalitarian optimum, and compare this optimum with the laisser-faire equilibrium and with the utilitarian optimum. When the pollution threshold above which premature deaths arise is high, the ex post egalitarian optimum involves a pollution level equal to that threshold, and which is thus below the pollution prevailing at the laisser-faire and at the utilitarian optimum. But when the pollution threshold is low, the ex post egalitarian optimum exhibits a pollution level that is equal to the one prevailing at the laisser-faire, and higher than the one prevailing at the utilitarian optimum.