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A bitter choice turned sweet: How acknowledging individuals' concern at having a low relative income serves to align utilitarianism and egalitarianism

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  • Stark, Oded
  • Jakubek, Marcin
  • Martyna, Kobus

Abstract

When individuals’ utility is a convex combination of their income and their concern at having a low relative income (the weights attached to income and to the concern at having a low relative income sum up to one), the maximization of aggregate utility yields an equal income distribution. This alignment of utilitarianism and egalitarianism is obtained for any number of individuals, and for general utility functions that are convex combinations of a power function of income and the concern at having a low relative income. The alignment can also hold when the weights sum up to a number different than one.

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  • Stark, Oded & Jakubek, Marcin & Martyna, Kobus, 2015. "A bitter choice turned sweet: How acknowledging individuals' concern at having a low relative income serves to align utilitarianism and egalitarianism," Discussion Papers 199354, University of Bonn, Center for Development Research (ZEF).
    • Handle: RePEc:ags:ubzefd:199354
    DOI: 10.22004/ag.econ.199354
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    1. Stark, Oded, 2013. "Stressful Integration," European Economic Review, Elsevier, vol. 63(C), pages 1-9.
    2. Daniel J. Zizzo & Andrew J. Oswald, 2001. "Are People Willing to Pay to Reduce Others'Incomes?," Annals of Economics and Statistics, GENES, issue 63-64, pages 39-65.
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    6. Oded Stark & Walter Hyll, 2011. "On the Economic Architecture of the Workplace: Repercussions of Social Comparisons among Heterogeneous Workers," Journal of Labor Economics, University of Chicago Press, vol. 29(2), pages 349-375.
    7. C. Simon Fan & Oded Stark, 2011. "A Theory Of Migration As A Response To Occupational Stigma," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 549-571, May.
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    18. Frey, Bruno S & Stutzer, Alois, 2000. "Happiness, Economy and Institutions," Economic Journal, Royal Economic Society, vol. 110(466), pages 918-938, October.
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    Cited by:

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    2. Luciano Ferreira Silva & Arnoldo José Hoyos Guevara & Ernesto D. R. Santibanez Gonzalez & Paulo Sergio Gonçalves Oliveira, 2019. "Evolution toward environment sustainable behavior: search for survival in the plastic industry in Brazil," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(3), pages 1291-1320, June.

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    More about this item

    Keywords

    Health Economics and Policy; Public Economics;

    JEL classification:

    • H0 - Public Economics - - General
    • I0 - Health, Education, and Welfare - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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