This paper examines the segregative properties of Tiebout-type process of jurisdiction formation by freely mobile households in the presence of a central government which makes equalization transfers across jurisdictions so as to maximize a generalized utilitarian or a max–min objective. It is shown that the introduction of such a central government significantly affects the set of stable jurisdiction structures. It is also shown that the class of households additively separable preferences that guarantees the wealth segregation of any stable jurisdiction structure is unaffected by the presence of a central government if this government uses a generalized utilitarian objective. Copyright Springer-Verlag 2013
We provide an axiomatic characterization of a family of criteria for ranking completely uncertain and/or ambiguous decisions. A completely uncertain decision is described by the finite set of all its consequences. An ambiguous decision is described as a finite set of possible probability distributions over a finite set of prizes. Every criterion in the characterized family can be thought of as assigning to every consequence (probability distribution) of a decision an equal probability of occurrence and as comparing decisions on the basis of the expected utility of their consequences (probability distributions) for some utility function.
We provide foundations for robust normative evaluation of distributions of two attributes, one of which is cardinally measurable and transferable between individuals and the other is ordinal and non-transferable. The result that we establish takes the form of an analogue to the standard Hardy–Littlewood–Pólya theorem for distributions of one cardinal attribute. More specifically, we identify the transformations of the distributions which guarantee that social welfare increases according to utilitarian unanimity provided that the utility function is concave in the cardinal attribute and that its marginal utility with respect to the same attribute is non-increasing in the ordinal attribute. We establish that this unanimity ranking of the distributions is equivalent to the ordered poverty gap quasi-ordering introduced by Bourguignon . Finally, we show that, if one distribution dominates another according to the ordered poverty gap criterion, then the former can be derived from the latter by means of an appropriate and finite sequence of such transformations.
The normative foundations of the comparison of distributions of a single attribute between a given number of individuals are by now well-established. They originate in the equivalence between four plausible answers to the question of when a distribution x can be considered normatively better than a distribution y.
At an abstract level, one can view the various theories of justice that have been discussed in economics and philosophy in the last 50 years or so, including of course that of Serge-Christophe Kolm (2005), as attempts at providing criteria for comparing alternative societies on the basis of their “ethical goodness.” The compared societies can be truly distinct societies, such as India and China. They can also be the same society examined at two different points of time (say India today and India 20 years ago) or, more counterfactually, before and after a tax reform or demographic shock.
This paper contrasts conventional real GDP and price indicators of living standard, interpreted as revealing information on welfare, with others, that aim at reflecting individual freedom. It is argued that freedom-based indices are easier to use and interpret than traditional real GDP ones. Illustrations of the differences between the two classes of indices are provided for international comparisons, as well as for the evaluation of growth and inflation in France.
Journal: Economie et statistique
No abstract is available for this item.