IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/9622.html
   My bibliography  Save this paper

Fairness Versus Welfare: Notes on the Pareto Principle, Preferences, and Distributive Justice

Author

Listed:
  • Louis Kaplow
  • Steven Shavell

Abstract

In Fairness versus Welfare, we advance the thesis that social policies should be assessed based entirely on their effects on individuals' well-being. This thesis implies that no independent weight should be accorded to notions of fairness (other than many purely distributive notions). We support our thesis in three ways: by demonstrating how notions of fairness perversely reduce welfare, indeed, sometimes everyone's well-being; by revealing numerous other deficiencies in the notions, including their lack of sound rationales; and by providing an account of notions of fairness that explains their intuitive appeal in a manner that reinforces the conclusion that they should not be treated as independent principles in policy assessment. In this essay, we discuss these three themes and comment on issues raised by Richard Craswell, Lewis Kornhauser, and Jeremy Waldron.

Suggested Citation

  • Louis Kaplow & Steven Shavell, 2003. "Fairness Versus Welfare: Notes on the Pareto Principle, Preferences, and Distributive Justice," NBER Working Papers 9622, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9622
    Note: LE PE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w9622.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kaplow, Louis & Shavell, Steven, 1994. "Why the Legal System Is Less Efficient Than the Income Tax in Redistributing Income," The Journal of Legal Studies, University of Chicago Press, vol. 23(2), pages 667-681, June.
    2. Richard Craswell, 2003. "Kaplow and Shavell on the Substance of Fairness," The Journal of Legal Studies, University of Chicago Press, vol. 32(1), pages 245-275, January.
    3. Kaplow, Louis & Shavell, Steven, 1999. "The Conflict between Notions of Fairness and the Pareto Principle," American Law and Economics Review, American Law and Economics Association, vol. 1(1-2), pages 63-77, Fall.
    4. Jeremy Waldron, 2003. "Locating Distribution," The Journal of Legal Studies, University of Chicago Press, vol. 32(1), pages 277-302, January.
    5. Louis Kaplow & Steven Shavell, 2001. "Any Non-welfarist Method of Policy Assessment Violates the Pareto Principle," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 281-286, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Antonides, Gerrit & Kroft, Maaike, 2005. "Fairness judgments in household decision making," Journal of Economic Psychology, Elsevier, vol. 26(6), pages 902-913, December.
    2. Noemi Florea, 2020. "The Public’s Guide to Climate Change Mitigation: Contemporary Crises," Proceedings of the 17th International RAIS Conference, June 1-2, 2020 028nf, Research Association for Interdisciplinary Studies.
    3. Manuel Couret Branco, 2007. "Economics Against Human Rights," Economics Working Papers 02_2007, University of Évora, Department of Economics (Portugal).
    4. Sergey Belozyorov & Zhanna Pisarenko, 2015. "Pension Reforms in Countries with Developed and Transitional Economies," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(4), pages 158-169.
    5. Rossi, Enrico, 2020. "Reconsidering the dual nature of property rights: personal property and capital in the law and economics of property rights," LSE Research Online Documents on Economics 105840, London School of Economics and Political Science, LSE Library.
    6. Mongin, Philippe, 2019. "Interview of Peter J. Hammond," The Warwick Economics Research Paper Series (TWERPS) 1190, University of Warwick, Department of Economics.
    7. Olivia D'Aoust & Olivier Sterck, 2016. "Who Benefits from Customary Justice? Rent-seeking, Bribery and Criminality in sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 25(3), pages 439-467.
    8. Jeffrey Wagner & Luiz Freitas, 2007. "Capturing moral economic context," Economics Bulletin, AccessEcon, vol. 4(14), pages 1-10.
    9. Manuel Couret Branco, 2006. "The Right to Work and the Political Economy of Human Rights," Economics Working Papers 08_2006, University of Évora, Department of Economics (Portugal).
    10. repec:ebl:ecbull:v:4:y:2007:i:14:p:1-10 is not listed on IDEAS
    11. Krecke, Elisabeth, 2003. "Economic analysis and legal pragmatism," International Review of Law and Economics, Elsevier, vol. 23(4), pages 421-437, December.
    12. Mikolaj Rylski, 2021. "On Fairness and Moral Force of the Employment Contract in the Post-Industrial Era," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 461-477.
    13. Safarzyńska, Karolina, 2013. "Evolutionary-economic policies for sustainable consumption," Ecological Economics, Elsevier, vol. 90(C), pages 187-195.
    14. Mark White, 2004. "Preaching to the choir: A response to Kaplow and Shavell's Fairness Versus Welfare," Review of Political Economy, Taylor & Francis Journals, vol. 16(4), pages 507-515.
    15. Aaron Nicholas & Birendra Rai, 2019. "Are Efficient Bargaining Power Disparities Unfair? An Experimental Test," Monash Economics Working Papers 02-19, Monash University, Department of Economics.
    16. Yi Li, 2019. "Apportioning indivisible damage and strategic diffusion of pollution abatement technology," Journal of Economics, Springer, vol. 126(1), pages 19-42, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Garoupa, Nuno & Stephen, Frank, 2003. "A Note on Optimal Law Enforcement with Legal Aid," CEPR Discussion Papers 4113, C.E.P.R. Discussion Papers.
    2. Louis Kaplow, 2006. "Discounting Dollars, Discounting Lives: Intergenerational Distributive Justice and Efficiency," NBER Working Papers 12239, National Bureau of Economic Research, Inc.
    3. Jeong-Yoo Kim, 2006. "Strict liability versus negligence when the injurer's activity involves positive externalities," European Journal of Law and Economics, Springer, vol. 22(1), pages 95-104, July.
    4. A. Mitchell Polinsky & Steven Shavell, 2005. "Economic Analysis of Law," Discussion Papers 05-005, Stanford Institute for Economic Policy Research.
    5. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    6. Kristof Bosmans & Z. Emel Öztürk, 2022. "Laissez-faire versus Pareto," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 58(4), pages 741-751, May.
    7. Richard Craswell, 2003. "Kaplow and Shavell on the Substance of Fairness," The Journal of Legal Studies, University of Chicago Press, vol. 32(1), pages 245-275, January.
    8. Vipul Bhatt & Masao Ogaki & Yuichi Yaguchi, 2017. "Introducing Virtue Ethics into Normative Economics for Models with Endogenous Preferences," RCER Working Papers 600, University of Rochester - Center for Economic Research (RCER).
    9. John A. Weymark, 2017. "Conundrums for nonconsequentialists," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(2), pages 269-294, February.
    10. Koen Decancq & Marc Fleurbaey & Erik Schokkaert, 2015. "Happiness, Equivalent Incomes and Respect for Individual Preferences," Economica, London School of Economics and Political Science, vol. 82, pages 1082-1106, December.
    11. Dominique Demougin & Claude Denys Fluet, 2004. "Deterrence vs Judicial Error: A Comparative View of Standards of Proof," CIRANO Working Papers 2004s-38, CIRANO.
    12. Matthew Weinzierl, 2018. "Revisiting the Classical View of Benefit‐based Taxation," Economic Journal, Royal Economic Society, vol. 128(612), pages 37-64, July.
    13. Eric Langlais, 2009. "On the Ambiguous Effects of Repression," Annals of Economics and Statistics, GENES, issue 93-94, pages 327-348.
    14. Homburg, Stefan, 2010. "Allgemeine Steuerlehre: Kapitel 1. Grundbegriffe der Steuerlehre," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 92547, September.
    15. Hackney, James Jr., 2003. "Law and neoclassical economics theory: a critical history of the distribution/efficiency debate," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(4), pages 361-390, September.
    16. Dai, Chifeng, 2009. "The appeals process in principal-agent relationships," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 451-462, August.
    17. Henrik Jordahl & Luca Micheletto, 2005. "Optimal Utilitarian Taxation and Horizontal Equity," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 7(4), pages 681-708, October.
    18. Eric Langlais & Marie Obidzinski, 2013. "Elected vs appointed public law enforcers," Working Papers hal-04141175, HAL.
    19. Blumkin, Tomer & Margalioth, Yoram & Sadka, Efraim, 2007. "Anti-discrimination rules versus income taxation in the pursuit of horizontal equity," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 1167-1176, June.
    20. Ilyana Kuziemko & Nicolas Longuet-Marx & Suresh Naidu, 2024. "“Compensate the Losers?†Economic Policy and Partisan Realignment in the US," Working Papers 321, Princeton University, Department of Economics, Center for Economic Policy Studies..

    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:9622. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.