Measuring Social Welfare: A Dog’'s Hind Leg Possibility Postulate

Our current methods of analysing policies and the distributions of wealth insure that society is on an efficient frontier. This is not the same as a social optimum. To choose the optimal point on the frontier we need a social welfare function. Following the ordinal revolution in demand theory, a large body of research concluded that social welfare functions don't exist. The intensity of people's preferences cannot be observed and hence interpersonal comparisons are essentially impossible. This paper argues that the intensity of people's preferences can be observed and could be incorporated into a social welfare function.

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Conference Paper/ Presentation
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JEL Codes:
D60; D63
Series Statement:
Conference Paper

 Record created 2017-04-01, last modified 2018-01-22

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