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The implicit welfare weights used when maximizing aggregate surplus

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Abstract

Aggregate consumer and producer surplus is a special type of social welfare function. In this paper, we investigate how individual welfare weights and how the social marginal utility of an increase in an individual's income behave if one uses aggregate surplus as a measure of social welfare. Our conclusion is that aggregate surplus is an ethically unacceptable measure of social welfare.

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Author notes

  1. Wilfried Pauwels

    Present address: Department of Economics, U.F.S.I.A., Prinsstraat 13, B-2000, Antwerp, Belgium

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    1. Wilfried Pauwels
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    Additional information

    I am grateful to B. De Borger and to an anonymous referee for helpful comments and suggestions on an earlier version of this paper. Of course, all remaining errors are mine.

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    Pauwels, W. The implicit welfare weights used when maximizing aggregate surplus. Zeitschr. f. Nationalökonomie 57, 261–277 (1993). https://doi.org/10.1007/BF01234639

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    • DOI: https://doi.org/10.1007/BF01234639

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