Discussion paper

DP14783 Aggregating Welfare Gains

I characterize the set of policy decision rules which, in addition to satisfying the standard Pareto condition and a weak anonymity requirement, utilize only information about the objective effects of a policy change and its associated profile of individual "welfare gains". I establish that, depending on the assumptions made about individual preferences, there is either no social decision rule that satisfies these requirements, or a unique one. I characterize the unique social decision rules under different common definitions of "welfare gains" and common assumptions about individual preferences.


Eden, M (2020), ‘DP14783 Aggregating Welfare Gains‘, CEPR Discussion Paper No. 14783. CEPR Press, Paris & London. https://cepr.org/publications/dp14783