On Distributional Value Judgments and Piecemeal Welfare Criteria
Bibliographic Data
| ID | 9726948 |
|---|---|
| Authors | Kotaro Suzumura (corresponding author) |
| Year | 1980 |
| Volume | 47 |
| Issue | 186 |
| Pages | 125 |
| Publication date | 1980-05-01 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | JSTOR (PUBLISHER) |
| DOI | 10.2307/2553231 |
| OpenAlex | W1990114682 |
| Language | EN |
| References cited | 8 |
As is well-known, the hypothetical compensation criteria proposed by Kaldor (1939), Hicks (1940), Scitovsky (1941) and Samuelson (1950) are intended to help us in judging about potential welfare without making interpersonal comparisons of wellbeing in cases where the Pareto unanimity principle is silent.' It is obvious, however, that a situation being potentially better than another is no reason to expect that actual welfare would be higher in the former than in the latter, since an actual change almost surely redistributes welfare in such a way as to favour some individuals and harm others. If nothing more than the increase or decrease in potential welfare can be identified, therefore, we have not yet arrived at any useful welfare conclusions. These considerations led Little (1957) to propose actual and piecemeal welfare criteria which explicitly incorporate distributional value judgments. The purpose of this paper is to re-examine the logical structure of his proposal. Ever since the appearance of the first edition of Little (1957) in 1950, his proposed welfare criteria have been discussed in detail, with occasional flare-ups of debates, and a number of logical criticisms have been raised against them, most notably by Arrow (1951), Chipman and Moore (1978), Graaff (1957), Kennedy (1952-1953, 1963a, b), Mishan (1963, 1965, 1969 and 1973), Ng (1971), Robertson et al. (1962) and Sen (1963). One might consider that Little's attempt to base piecemeal policy recommendations on the explicit introduction of value judgments about welfare distributions into the Kaldor-Hicks-Scitovsky compensation criteria for improved efficiency is now dead. Why, then, should we rake over these old ashes? Our plea is that the debate in the past does not seem to enable us to form a clear overview of this episode in the history of Paretian welfare economics. Indeed, many alleged anomalies of Little's welfare criteria seem to be off the point, and the logical performance of Little's criteria seems to be much better than one might be led to presume after having followed a rather cloudy debate in the literature. Little's proposal might well be criticized for other reasons (such as the consideration of its practical implementability and the like), but this is a different matter altogether. Even if we dismiss Little's proposai in the last analysis, nothing can be gained from being obscure about the nature of his proposal. It is with this purpose of partially rehabilitating Little's welfare criteria that this paper is written. The plan of the paper is as follows. Since Little's proposal is partly based on the hypothetical compensation criteria, it is a useful preliminary step to examine (in Section I) various compensation criteria hitherto discussed in the literature. Section II then studies the logical structure of Little's welfare criteria. All the proofs are relegated to Section III, so that those who are uninterested in the minor technicalities may skip this section without losing substance. Finally, Section IV puts forward some qualifications
Arrow · Economics · Harm · Interpersonal communication · Mathematical economics · Microeconomics · Pareto principle · Political science · Positive economics · Statistics · Unanimity · Value (mathematics) · Welfare · Computer Science · Decision-Making and Behavioral Economics · Economic and Environmental Valuation · Economic theories and models · Law · Mathematics · Psychology · Social Psychology
| Highly cited | No |
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