Social Welfare Function and Measurement of Income Inequality:A Rawlsian Perspective
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| Title | Social Welfare Function and Measurement of Income Inequality:A Rawlsian Perspective
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| Author | Ouyang Kui and Wang Guocheng |
| Organization | School of Economics & Management, Northwest University;Institute of Quantitative & Technical Economics, Chinese Academy of Social Sciences |
| Email | ouyangkui@nwu.edu.cn,gcwang@cass.org.cn |
| Key Words | Social Welfare Functional; Income Distribution; Minimal Justice; Rawlsianism; AKS Index |
| Abstract | The problem of income distribution is discussed from the viewpoint of modern social choice theory, and the traditional AKS measure of income inequality is reinterpreted under the framework of social welfare functional. It shows that for any social welfare function satisfying formal welfarism, concavity, continuity, anonymity, monotonicity, and normative homogeneity, if its representative utility function is concave and strictly increasing, then there must be a corresponding AKS index. Furthermore, based on Nash and Rawlsian social welfare functions, Nash-Atkinson index and Rawls-AKS index are proposed respectively; the later is independent from positive monotone transformation of the representative utility function, whose concavity is then relaxed. Finally, calculations of regional, urban, and rural income inequality in China are also implemented. |
| Serial Number | WP613 |
| Time | 2014-08-05 |
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