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
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
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