Welfare Dominance: an Application to Commodity Taxation
37 Pages Posted: 6 Apr 2007 Last revised: 14 Sep 2010
Date Written: December 1987
In this paper, we suggest a method which enables the user to identify commodities that all individuals who can agree on certain weak assumptions with regard to the social welfare function will agree upon as worth subsidizing or taxing in the absence of efficiency considerations. The method is based on an extension of the stochastic dominance criteria and is illustrated using data from Israel.
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