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29. New Welfare Economics > The Bergson Criterion: The Social Welfare Function

THE BERGSON CRITERION: THE SOCIAL WELFARE FUNCTION

It may be concluded from the foregoing discussion that the attempts to devise a value-free-welfare criterion have not yielded satisfactory results. It is not possible to evaluate a change which makes some persons better-off and some worse-off without making some implicit value judgement about the deservingness of an individual or a group. Recognizing the inevitability of value judgement, Bergson7 suggested that the only way out to resolve this problem is to formulate a set of explicit value judgement which enables the analyst to evaluate the situation. The value judgements may be set by the analyst himself, government authorities, legislators, social reformers or an individual or a group of the society. Bergson suggests that value judgements may be explicitly formulated in the form of a social welfare function. A social welfare function is an indifference map which ranks different combinations of individual utilities according to a set of explicit value judgements about the distribution of income. It is analogous to the utility function of a consumer. More precisely, a social welfare function is an ordinal index of welfare of the ....


  

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