Utilitarianism and unequal longevities: A remedy?
Classical utilitarianism, if coupled with standard assumptions such as the expected utility hypothesis and additive lifetime welfare, has the undesirable corollary to recommend a redistribution of resources from short-lived to long-lived agents, against any intuition of compensation. This paper proposes a remedy to that undesirable property of utilitarianism. This remedy consists in imputing, when solving the social planner's problem, the consumption equivalent of a long life to the consumption of long-lived agents. Provided the consumption equivalent is positive, the modified first-best problem exhibits a compensation of short-lived agents, under the form of a higher consumption. Then, in a general framework where agents differ in survival prospects, we compare the ex ante remedy (compensating agents with a lower life expectancy) and the ex post remedy (compensating short-lived agents), and show their incompatibility.
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- Marie-Louise Leroux & Grégory Ponthière, 2008. "Optimal tax policy and expected longevity: A mean and variance utility approach," PSE Working Papers halshs-00586247, HAL.
- LEROUX, Marie-Louise & PESTIEAU, Pierre & PONTHIÈRE, Grégory, 2008.
"Should we subsidize longevity?,"
CORE Discussion Papers
2008058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- LEROUX, Marie-Louise & PONTHIERE, Grégory, 2008. "Optimal tax policy and expected longevity: a mean and variance approach," CORE Discussion Papers 2008039, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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