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A Generalised Social Welfare Function and its Disaggregation by Components of Income: The Method and Application

Author

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  • Pundarik Mukhopadhaya

    () (National University of Singapore)

Abstract

The Social Welfare Function (SWF) is a decision rule to rank alternative social states in a complete fashion in terms of social welfare. This paper questions the philosophy of Paretian Principle as a desirable property of the SWF. It shows that it is possible to generalize the widely used Sen SWF, which can be non-Paretian under special circumstances. Also, it demonstrates the disaggregation method of this SWF by components of income using the Gini decomposition process. The method is applied to Australian Household Expenditure Survey data to estimate the trend of welfare of total income and its components in Australia from 1984 to 1993-94.

Suggested Citation

  • Pundarik Mukhopadhaya, 2001. "A Generalised Social Welfare Function and its Disaggregation by Components of Income: The Method and Application," Departmental Working Papers wp0121, National University of Singapore, Department of Economics.
  • Handle: RePEc:nus:nusewp:wp0121
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    File URL: http://www.fas.nus.edu.sg/ecs/pub/wp/wp0121.pdf
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    References listed on IDEAS

    as
    1. Amartya Sen, 1976. "Real National Income," Review of Economic Studies, Oxford University Press, vol. 43(1), pages 19-39.
    2. Sheshinski, Eytan, 1972. "Relation between a social welfare function and the gini index of income inequality," Journal of Economic Theory, Elsevier, vol. 4(1), pages 98-100, February.
    3. Shlomo Yitzhaki, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, Oxford University Press, vol. 93(2), pages 321-324.
    4. Dagum, Camilo, 1990. "On the relationship between income inequality measures and social welfare functions," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 91-102.
    5. Yitzhaki, Shlomo, 1982. "Relative deprivation and economic welfare," European Economic Review, Elsevier, vol. 17(1), pages 99-113.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Social Welfare Function; Paretian; Gini; Concentration Coefficient; Relative equity;

    JEL classification:

    • D39 - Microeconomics - - Distribution - - - Other
    • D69 - Microeconomics - - Welfare Economics - - - Other

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