Research Article

Economic Theory

, Volume 54, Issue 3, pp 675-692

Inequality aversion and separability in social risk evaluation

  • Marc FleurbaeyAffiliated withPrinceton University
  • , Stéphane ZuberAffiliated withCERSES, Université Paris Descartes and CNRSChair for Integrative Risk Management and Economics, Center for Economic Research, ETH Email author 

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Abstract

This paper examines how to satisfy “independence of the utilities of the dead” (Blackorby et al. in Econometrica 63:1303–1320, 1995; Bommier and Zuber in Soc Choice Welf 31:415–434, 2008) in the class of “expected equally distributed equivalent” social orderings (Fleurbaey in J Polit Econ 118:649–680, 2010) and inquires into the possibility to keep some aversion to inequality in this context. It is shown that the social welfare function must either be utilitarian or take a special multiplicative form. The multiplicative form is compatible with any degree of inequality aversion, but only under some constraints on the range of individual utilities.

Keywords

Risk Ex post equity Independence of the utilities of the dead

JEL Classification

D63 D71 D81