Utilitarism, Equivalence Scales and Logarithmic Utility
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Date
1994-05Metadata
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- Discussion Papers [1002]
Abstract
It is shown that if social welfare is the sum of logarithmic utility function, the optimal income distribution and the welfare effect of any income redistribution is independent of the equivalence scales. In optimum all households have the same per capita income. Based on this observation it is discussed to what extent traditional welfare theory can be said to be concerned about fair income distribution.