We provide a general method for extending social preferences defined for riskless economic enviro... more We provide a general method for extending social preferences defined for riskless economic environments to the context of risk and uncertainty. We apply the method to the problems of managing unemployment allowances (in the context of macroeconomic fluctuations) and catastrophic risks (in the context of climate change). The method guarantees ex post fairness and pays attention to individuals' risk attitudes, while ensuring rationality properties for social preferences, revisiting basic ideas from Harsanyi's celebrated aggregation theorem . The social preferences that we obtain do not always take the form of an expected utility criterion, but they always satisfy statewise dominance. When we require social preferences to be expected utilities, we obtain a variant of Harsanyi's result under a weak version of the Pareto principle, and a maximin criterion under a stronger Pareto requirement, whenever the ex post social ordering does not depend on people risk attitudes. We also show how non-expected utility individual preferences can be accommodated in the approach.
American Economic Journal: Microeconomics, Nov 1, 2021
HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific r... more HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific research documents, whether they are published or not. The documents may come from teaching and research institutions in France or abroad, or from public or private research centers. L'archive ouverte pluridisciplinaire HAL, est destinée au dépôt et à la diffusion de documents scientifiques de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.
Economics : the Open-Access, Open-Assessment e-Journal, Apr 15, 2015
Discounted utilitarianism and the Ramsey equation prevail in the debate on the discount rate on c... more Discounted utilitarianism and the Ramsey equation prevail in the debate on the discount rate on consumption. The utility discount rate is assumed to be constant and to reflect either the uncertainty about the existence of future generations or a pure preference for the present. The authors question the unique status of discounted utilitarianism and discuss the implications of alternative criteria addressing the key issues of equity in risky situations and variable population. To do so, they introduce a class of intertemporal social objectives, named Expected Prioritarian Equally Distributed Equivalent (EPEDE) criteria. The class is more flexible than discounted utilitarianism in terms of population ethics and it disentangles risk aversion and inequality aversion. The authors show that these social objectives imply interesting modifications of the Ramsey formula, and shed new light on Weitzman's "dismal theorem".
This was written when the first author was visiting the Norwegian School of Economics. We should ... more This was written when the first author was visiting the Norwegian School of Economics. We should like to thank John Broome, Agnar Sandmo and Erik Øiolf Sørensen for useful comments. The usual disclaimer applies.
HAL (Le Centre pour la Communication Scientifique Directe), Nov 12, 2021
HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific r... more HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific research documents, whether they are published or not. The documents may come from teaching and research institutions in France or abroad, or from public or private research centers. L'archive ouverte pluridisciplinaire HAL, est destinée au dépôt et à la diffusion de documents scientifiques de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.
When considering the social valuation of a life-year, there is a conflict between two basic intui... more When considering the social valuation of a life-year, there is a conflict between two basic intuitions: on the one hand, the intuition of universality, according to which the value of an additional life-year should be universal, and, as such, should be invariant to the context considered; on the other hand, the intuition of complementarity, according to which the value of a life-year should depend on what this extra-life-year allows for, and, hence, on the quality of that life-year, because the quantity of life and the quality of life are complement to each other. This paper proposes three distinct accounts of the intuition of universality, and shows that those accounts either conflict with a basic monotonicity property, or lead to indifference with respect to how life-years are distributed within the population. Those results support the abandon of the intuition of universality. But abandoning the intuition of universality does not prevent a social evaluator from giving priority, w...
In keeping with the previous IPCC assessments, this chapter considers sustainable development (SD... more In keeping with the previous IPCC assessments, this chapter considers sustainable development (SD) and equity as matters of policy relevance for climate change decision makers. The chapter examines the ways in which climate change is in fact inextricably linked with SD and equity, and it does so with the aim of drawing policy-relevant conclusions regarding equitable and sustainable responses to climate change. In one direction, the link is self-evident: an effective climate response is necessary for equitable and sustainable development to occur. The disruptions that climate change would cause in the absence of an effective societal response are sufficiently severe (see Working Group (WG) I and II contributions to the IPCC Fifth Assessment Report (AR5)) to severely compromise development, even taking into account future societies' ability to adapt (Shalizi and Lecocq, 2010). Nor is this development likely to be equitable, as an increasingly inhospitable climate will most serious...
A model that only focuses on economic relations, and in which e-ciency and equity are dened in te... more A model that only focuses on economic relations, and in which e-ciency and equity are dened in terms of resource allocation may miss an important part of the picture. We propose an integrated model that embeds economic activities in a larger game of social interactions, and dene comprehensive notions of e-ciency and equity. Social interactions provide additional sources of ine-ciencies and inequalities, including through the mere lack of coordination between the regulation mechanisms of the economic sphere and the social sphere. Remedies may require more than market solutions and redistribution of resources. In particular, social norms are likely to play an important role.
The achievements and limitations of the classical theory of optimal labor-income taxation based o... more The achievements and limitations of the classical theory of optimal labor-income taxation based on social welfare functions are now well known. Even though utilitarianism still dominates public economics, recent interest has arisen for broadening the normative approach and making room for fairness principles such as desert or responsibility. Fairness principles sometimes provide immediate recommendations about the relative weights to assign to various income ranges, but in general require a careful choice of utility representations embodying the relevant interpersonal comparisons. The main message of this paper is that the traditional tool of welfare economics, the social welfare function framework, is flexible enough to incorporate many approaches, from egalitarianism to libertarianism. ( JEL D63, H21, H24, J24)
We analyze the role of ethical values in the determination of the social cost of carbon, arguing ... more We analyze the role of ethical values in the determination of the social cost of carbon, arguing that the familiar debate about discounting is too narrow. Other ethical issues are equally important to computing the social cost of carbon, and we highlight inequality, risk, and population ethics. Although the usual approach, in the economics of costbenefit analysis for climate policy, is confined to a utilitarian axiology, the methodology of the social cost of carbon is rather flexible and can be expanded to a broader set of social-welfare approaches.
In this paper, we study interpersonal comparisons of wellbeing. We show that using subjective wel... more In this paper, we study interpersonal comparisons of wellbeing. We show that using subjective wellbeing (SWB) levels can be in conflict with individuals' judgments about their own lives. We propose therefore an alternative wellbeing measure in terms of equivalent incomes that respects individual preferences. We show how SWB surveys can be used to derive the ordinal information about preferences needed to calculate equivalent incomes. We illustrate our approach with Russian panel data (RLMS‐HSE) for the period 1995–2003 and compare it to standard wellbeing measures such as expenditures and SWB. We find that different groups are identified as worst off. For nothing is more certain, than that despair has almost the same effect on us with enjoyment, and that we are no sooner acquainted with the impossibility of satisfying any desire, than the desire itself vanishes. David Hume, A Treatise of Human Nature
This paper proposes four concepts of exploitation that encapsulate common uses of the word in soc... more This paper proposes four concepts of exploitation that encapsulate common uses of the word in social interactions: unfair advantage, unequal exchange, using persons as means, and free-riding. It briefly discusses how these concepts appear in the literature (the first two are prominent in Roemer’s classical work), and then examines how these forms of exploitation are related and how they can occur.
Documents de travail du Centre d'Economie de la Sorbonne, Mar 1, 2020
Climate change-related mortality may strongly affect human well-being. By reducing life expectanc... more Climate change-related mortality may strongly affect human well-being. By reducing life expectancy, it reduces the well-being of some individuals. This may exacerbate existing inequalities: ex-ante inequality among people in different groups or regions of the world; ex-post inequality in experienced well-being by people in the same generation. But mortality may also reduce total population size by preventing some individuals from having children. This raises the population-ethical problem of how total population size should be valued. This paper proposes a methodology to measure the welfare effects of climate change through population and inequality change. We illustrate the methodology using a climate-economy integrated assessment model involving endogenous population change due to climate change-related mortality.
We highlight a new paradox for the social evaluation of risk that bears on the evaluation of indi... more We highlight a new paradox for the social evaluation of risk that bears on the evaluation of individual well-being rather than social welfare, but has serious implications for social evaluation. The paradox consists in a tension between rationality, respect for individual preferences, and a principle of informational parsimony that excludes individual risk attitudes from the assessment of riskless situations. No evaluation criterion can satisfy these three principles. This impossibility result has implications for the evaluation of social welfare under risk, especially when the preferences of some individuals are not known. It generalizes existing impossibility results, while relying on very weak principles of social rationality and respect for individual preferences. We explore the possibilities opened by weakening each of our three principles and discuss the advantages and drawbacks of these different routes.
How to evaluate and compare social prospects when there may be a risk on i) the actual allocation... more How to evaluate and compare social prospects when there may be a risk on i) the actual allocation people will receive; ii) the existence of these future people; and iii) their preferences? This paper investigate this question that may arise when considering policies that endogenously affect future people, for instance climate policy. We show that there is no social ordering that meets minimal requirements of fairness, social rationality, and respect for people's ex ante preferences. We explore three ways to avoid this impossibility. First, if we drop the ex ante Pareto requirement, we can obtain fair ex post criteria that take an (arbitrary) expected utility of an equally-distributed equivalent level of well-being. Second, if the social ordering is not an expected utility, we can obtain fair ex ante criteria that assess uncertain individual prospects with a certainty-equivalent measure of well-being. Third, if we accept that interpersonal comparisons rely on VNM utility functions even in absence of risk, we can construct expected utility social orderings that satisfy of some version of Pareto ex ante.
We provide a general method for extending social preferences defined for riskless economic enviro... more We provide a general method for extending social preferences defined for riskless economic environments to the context of risk and uncertainty. We apply the method to the problems of managing unemployment allowances (in the context of macroeconomic fluctuations) and catastrophic risks (in the context of climate change). The method guarantees ex post fairness and pays attention to individuals' risk attitudes, while ensuring rationality properties for social preferences, revisiting basic ideas from Harsanyi's celebrated aggregation theorem . The social preferences that we obtain do not always take the form of an expected utility criterion, but they always satisfy statewise dominance. When we require social preferences to be expected utilities, we obtain a variant of Harsanyi's result under a weak version of the Pareto principle, and a maximin criterion under a stronger Pareto requirement, whenever the ex post social ordering does not depend on people risk attitudes. We also show how non-expected utility individual preferences can be accommodated in the approach.
American Economic Journal: Microeconomics, Nov 1, 2021
HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific r... more HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific research documents, whether they are published or not. The documents may come from teaching and research institutions in France or abroad, or from public or private research centers. L'archive ouverte pluridisciplinaire HAL, est destinée au dépôt et à la diffusion de documents scientifiques de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.
Economics : the Open-Access, Open-Assessment e-Journal, Apr 15, 2015
Discounted utilitarianism and the Ramsey equation prevail in the debate on the discount rate on c... more Discounted utilitarianism and the Ramsey equation prevail in the debate on the discount rate on consumption. The utility discount rate is assumed to be constant and to reflect either the uncertainty about the existence of future generations or a pure preference for the present. The authors question the unique status of discounted utilitarianism and discuss the implications of alternative criteria addressing the key issues of equity in risky situations and variable population. To do so, they introduce a class of intertemporal social objectives, named Expected Prioritarian Equally Distributed Equivalent (EPEDE) criteria. The class is more flexible than discounted utilitarianism in terms of population ethics and it disentangles risk aversion and inequality aversion. The authors show that these social objectives imply interesting modifications of the Ramsey formula, and shed new light on Weitzman's "dismal theorem".
This was written when the first author was visiting the Norwegian School of Economics. We should ... more This was written when the first author was visiting the Norwegian School of Economics. We should like to thank John Broome, Agnar Sandmo and Erik Øiolf Sørensen for useful comments. The usual disclaimer applies.
HAL (Le Centre pour la Communication Scientifique Directe), Nov 12, 2021
HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific r... more HAL is a multi-disciplinary open access archive for the deposit and dissemination of scientific research documents, whether they are published or not. The documents may come from teaching and research institutions in France or abroad, or from public or private research centers. L'archive ouverte pluridisciplinaire HAL, est destinée au dépôt et à la diffusion de documents scientifiques de niveau recherche, publiés ou non, émanant des établissements d'enseignement et de recherche français ou étrangers, des laboratoires publics ou privés.
When considering the social valuation of a life-year, there is a conflict between two basic intui... more When considering the social valuation of a life-year, there is a conflict between two basic intuitions: on the one hand, the intuition of universality, according to which the value of an additional life-year should be universal, and, as such, should be invariant to the context considered; on the other hand, the intuition of complementarity, according to which the value of a life-year should depend on what this extra-life-year allows for, and, hence, on the quality of that life-year, because the quantity of life and the quality of life are complement to each other. This paper proposes three distinct accounts of the intuition of universality, and shows that those accounts either conflict with a basic monotonicity property, or lead to indifference with respect to how life-years are distributed within the population. Those results support the abandon of the intuition of universality. But abandoning the intuition of universality does not prevent a social evaluator from giving priority, w...
In keeping with the previous IPCC assessments, this chapter considers sustainable development (SD... more In keeping with the previous IPCC assessments, this chapter considers sustainable development (SD) and equity as matters of policy relevance for climate change decision makers. The chapter examines the ways in which climate change is in fact inextricably linked with SD and equity, and it does so with the aim of drawing policy-relevant conclusions regarding equitable and sustainable responses to climate change. In one direction, the link is self-evident: an effective climate response is necessary for equitable and sustainable development to occur. The disruptions that climate change would cause in the absence of an effective societal response are sufficiently severe (see Working Group (WG) I and II contributions to the IPCC Fifth Assessment Report (AR5)) to severely compromise development, even taking into account future societies' ability to adapt (Shalizi and Lecocq, 2010). Nor is this development likely to be equitable, as an increasingly inhospitable climate will most serious...
A model that only focuses on economic relations, and in which e-ciency and equity are dened in te... more A model that only focuses on economic relations, and in which e-ciency and equity are dened in terms of resource allocation may miss an important part of the picture. We propose an integrated model that embeds economic activities in a larger game of social interactions, and dene comprehensive notions of e-ciency and equity. Social interactions provide additional sources of ine-ciencies and inequalities, including through the mere lack of coordination between the regulation mechanisms of the economic sphere and the social sphere. Remedies may require more than market solutions and redistribution of resources. In particular, social norms are likely to play an important role.
The achievements and limitations of the classical theory of optimal labor-income taxation based o... more The achievements and limitations of the classical theory of optimal labor-income taxation based on social welfare functions are now well known. Even though utilitarianism still dominates public economics, recent interest has arisen for broadening the normative approach and making room for fairness principles such as desert or responsibility. Fairness principles sometimes provide immediate recommendations about the relative weights to assign to various income ranges, but in general require a careful choice of utility representations embodying the relevant interpersonal comparisons. The main message of this paper is that the traditional tool of welfare economics, the social welfare function framework, is flexible enough to incorporate many approaches, from egalitarianism to libertarianism. ( JEL D63, H21, H24, J24)
We analyze the role of ethical values in the determination of the social cost of carbon, arguing ... more We analyze the role of ethical values in the determination of the social cost of carbon, arguing that the familiar debate about discounting is too narrow. Other ethical issues are equally important to computing the social cost of carbon, and we highlight inequality, risk, and population ethics. Although the usual approach, in the economics of costbenefit analysis for climate policy, is confined to a utilitarian axiology, the methodology of the social cost of carbon is rather flexible and can be expanded to a broader set of social-welfare approaches.
In this paper, we study interpersonal comparisons of wellbeing. We show that using subjective wel... more In this paper, we study interpersonal comparisons of wellbeing. We show that using subjective wellbeing (SWB) levels can be in conflict with individuals' judgments about their own lives. We propose therefore an alternative wellbeing measure in terms of equivalent incomes that respects individual preferences. We show how SWB surveys can be used to derive the ordinal information about preferences needed to calculate equivalent incomes. We illustrate our approach with Russian panel data (RLMS‐HSE) for the period 1995–2003 and compare it to standard wellbeing measures such as expenditures and SWB. We find that different groups are identified as worst off. For nothing is more certain, than that despair has almost the same effect on us with enjoyment, and that we are no sooner acquainted with the impossibility of satisfying any desire, than the desire itself vanishes. David Hume, A Treatise of Human Nature
This paper proposes four concepts of exploitation that encapsulate common uses of the word in soc... more This paper proposes four concepts of exploitation that encapsulate common uses of the word in social interactions: unfair advantage, unequal exchange, using persons as means, and free-riding. It briefly discusses how these concepts appear in the literature (the first two are prominent in Roemer’s classical work), and then examines how these forms of exploitation are related and how they can occur.
Documents de travail du Centre d'Economie de la Sorbonne, Mar 1, 2020
Climate change-related mortality may strongly affect human well-being. By reducing life expectanc... more Climate change-related mortality may strongly affect human well-being. By reducing life expectancy, it reduces the well-being of some individuals. This may exacerbate existing inequalities: ex-ante inequality among people in different groups or regions of the world; ex-post inequality in experienced well-being by people in the same generation. But mortality may also reduce total population size by preventing some individuals from having children. This raises the population-ethical problem of how total population size should be valued. This paper proposes a methodology to measure the welfare effects of climate change through population and inequality change. We illustrate the methodology using a climate-economy integrated assessment model involving endogenous population change due to climate change-related mortality.
We highlight a new paradox for the social evaluation of risk that bears on the evaluation of indi... more We highlight a new paradox for the social evaluation of risk that bears on the evaluation of individual well-being rather than social welfare, but has serious implications for social evaluation. The paradox consists in a tension between rationality, respect for individual preferences, and a principle of informational parsimony that excludes individual risk attitudes from the assessment of riskless situations. No evaluation criterion can satisfy these three principles. This impossibility result has implications for the evaluation of social welfare under risk, especially when the preferences of some individuals are not known. It generalizes existing impossibility results, while relying on very weak principles of social rationality and respect for individual preferences. We explore the possibilities opened by weakening each of our three principles and discuss the advantages and drawbacks of these different routes.
How to evaluate and compare social prospects when there may be a risk on i) the actual allocation... more How to evaluate and compare social prospects when there may be a risk on i) the actual allocation people will receive; ii) the existence of these future people; and iii) their preferences? This paper investigate this question that may arise when considering policies that endogenously affect future people, for instance climate policy. We show that there is no social ordering that meets minimal requirements of fairness, social rationality, and respect for people's ex ante preferences. We explore three ways to avoid this impossibility. First, if we drop the ex ante Pareto requirement, we can obtain fair ex post criteria that take an (arbitrary) expected utility of an equally-distributed equivalent level of well-being. Second, if the social ordering is not an expected utility, we can obtain fair ex ante criteria that assess uncertain individual prospects with a certainty-equivalent measure of well-being. Third, if we accept that interpersonal comparisons rely on VNM utility functions even in absence of risk, we can construct expected utility social orderings that satisfy of some version of Pareto ex ante.
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Papers by Marc Fleurbaey