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Some Empirical Evidence on the Social Welfare Maximization Hypothesis

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  • Yunker, James A

Abstract

Evidence is presented that suggests that the concept of social welfare maximization, always heretofore considered part of normative economics, may possess positive content. A simple, but comprehensive, general equilibrium model of the U.S. economy is developed and numerically implemented. According to the simple model, the aggregate average tax rate that maximizes the Benthamite (sum of utilities) social welfare criterion is 0.39. For a Nash (product of utilities) social welfare criterion, the corresponding optimal tax rate is 0.42. These values are quite close to the aggregate average tax rate currently prevailing in the United States.

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  • Yunker, James A, 1989. "Some Empirical Evidence on the Social Welfare Maximization Hypothesis," Public Finance = Finances publiques, , vol. 44(1), pages 110-133.
    • Handle: RePEc:pfi:pubfin:v:44:y:1989:i:1:p:110-33
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    Cited by:

    1. James A. Yunker, 1999. "Application of The els Model: Optimal Tax Rate and Public Good Proportion," Public Finance Review, , vol. 27(1), pages 19-51, January.
    2. Takao FUKUCHI, 1998. "A Simulation Analysis Of The Urban Informal Sector," The Developing Economies, Institute of Developing Economies, vol. 36(3), pages 225-256, September.

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