FEEM working papers "Note di lavoro"
Date: 27/2/2017

Welfare as Simple(x) Equity Equivalents

Loic Berger (IESEG School of Management, Fondazione Eni Enrico Mattei); Johannes Emmerling (Fondazione Eni Enrico Mattei, Centro Euro-Mediterraneo sui Cambiamenti Climatici)
JEL n.: D60, D63, D30
Keywords: Utilitarianism, Inequality, Inequity Aversion, Risk Aversion, Intertemporal Welfare, Discounting


Inequity plays a fundamental role in the evaluation of social welfare in many dimensions.We revisit the concept of inequity, whether across states of world (uncertainty), across individuals (inequality) and across generations (intergenerational equity), using a common framework generalizing the discounted expected utilitarianism approach. We propose a general measure of welfare as equity equivalents and develop the corresponding inequity index. We then allow for different degrees of inequity aversion across the three dimensions to span a simplex of possible inequity preferences and relate it to the recent literature on this topic. We show that the ordering of aggregation across the different dimensions matters for welfare evaluations and that many welfare-theoretical approaches developed in the literature may be seen as special cases of this general framework.


Suggested citation: Berger, L., J. Emmerling, (2017), 'Welfare as Simple(x) Equity Equivalents', Nota di Lavoro 14.2017, Milan, Italy: Fondazione Eni Enrico Mattei

Download file
Download PDF file

FEEM Newsletter & Update

Subscribe to stay connected.

Your personal data will be processed by Fondazione Eni Enrico Mattei. – data Controller – with the aim of emailing the FEEM newsletter & Update. The use of Your email address is necessary for the implementation of the newsletter service. You are invited to read the Privacy Policy in order to obtain additional information about the protection of Your rights.

This Website uses technical cookies and cookie analytics, as well as “third party” profiling cookies.
If you close this banner or you decide to continue navigating on this Website, you express consent to the use of cookies. If you need additional information or you wish to express selective choices on the use of cookies, please refer to the   Cookie PolicyI agree