Reconciling the Rawlsian and the utilitarian approaches to the maximization of social welfare

Under a deadweight loss of tax and transfer, there is tension between the optimal policy choices of a Rawlsian social planner and a utilitarian social planner. However, when with a weight greater than a certain critical value the individuals’ utility functions incorporate distaste for low relative income, a utilitarian will select exactly the same income distribution as a Rawlsian.


Issue Date:
Jan 24 2014
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/162881
Total Pages:
29
JEL Codes:
D31; D60; H21; I38
Series Statement:
ZEF-Discussion Papers
184




 Record created 2017-04-01, last modified 2017-08-27

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