A Concern About Low Relative Income, and the Alignment of Utilitarianism with Egalitarianism

Stark, Oded; Kobus, Martyna; Jakubek, Marcin

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A Concern About Low Relative Income, and the Alignment of Utilitarianism with Egalitarianism

ZEF- Discussion Papers on Development Policy No. 156

14 Pages Posted: 29 Oct 2011

See all articles by Oded Stark

Oded Stark

University of Bonn; University of Warsaw; University of Tuebingen

Marcin Jakubek

Polish Academy of Sciences (PAS) - Institute of Economics (INE PAN)

Date Written: October 28, 2011

Abstract

A utilitarian social planner who maximizes social welfare assigns the available income to those who are most efficient in converting income into utility. However, when individuals are concerned about their income falling behind the incomes of others, the optimal income distribution under utilitarianism is equality of incomes.

Keywords: Utilitarianism, Income equality, Social welfare maximization, Relative income

JEL Classification: H0, I0, I30, I31

Suggested Citation: Suggested Citation

Stark, Oded and Kobus, Martyna and Jakubek, Marcin, A Concern About Low Relative Income, and the Alignment of Utilitarianism with Egalitarianism (October 28, 2011). ZEF- Discussion Papers on Development Policy No. 156, Available at SSRN: https://ssrn.com/abstract=1950610