19/03/2025    12:50 > "Consumer welfare and equality of opportunity". 

Antoine Germain (CORE) 

will give a presentation on : 

Consumer welfare and equality of opportunity. 

Abstract : 

Hicksian compensating and equivalent variations are widely used by cost-benefit analysts but criticized by theorists for their intransitivity and lack of inequality aversion. In a general consumption environment allowing for price dispersion in addition to income and preference heterogeneity, this paper builds an axiomatic theory of consumer welfare based on the ethics of equality of opportunity: unequal budgets create welfare-relevant inequalities but heterogeneous preferences do not. When combined with a separability condition, these ethics single out a welfare measure that is transitive, inequality-averse and based on a particular money-metric utility function. I discuss implications for equivalence scales and cost of living indices. 
 

   CORE C.035