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Social Welfare, Inequality and Deprivation

Listed author(s):
  • Brice MAGDALOU (CEREGMIA)
  • Patrick MOYES (GREThA UMR CNRS 5113)

We provide a characterization of the generalised satisfaction -- in our terminology non-deprivation -- quasi-ordering introduced by S.R. Chakravarty (Keio Economic Studies 34 (1997), 17--32) for making welfare comparisons based on the absence of deprivation. We show that the non-deprivation quasi-ordering obeys a weaker version of the principle of transfers: welfare improves only for specific combinations of progressive transfers which require that the same amount be taken from richer individuals and allocated to one arbitrary poorer individual. We identify the subclass of extended Gini social welfare functions that are consistent with this principle and we show that the unanimity of value judgements among this class is identical to the ranking of distributions implied by the non-deprivation quasi-ordering. We extend the approach to the measurement of inequality by considering the corresponding relative and absolute ethical inequality indices.

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File URL: http://cahiersdugretha.u-bordeaux4.fr/2008/2008-23.pdf
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Paper provided by Groupe de Recherche en Economie Théorique et Appliquée in its series Cahiers du GREThA with number 2008-23.

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Date of creation: 2008
Handle: RePEc:grt:wpegrt:2008-23
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