Corrigendum to “Relation Between a Social Welfare Function and the Gini Index of Income Inequality” Journal of Economic Theory 4 (1972): 98-100

• Published in: Journal of economic theory Vol. 206; p. 105543
• Main Author: Stark, Oded
• Format: Journal Article
• Language: English
• Published: Elsevier Inc 01.12.2022
• Subjects: A link to the Rawlsian social welfare function; Dependence of social welfare on the lower income; Social welfare as a product of aggregate income and income equality; Social welfare function; D63; Social welfare as a product of aggregate income and income equality; C43; D31; P46; D01; Dependence of social welfare on the lower income; I31; A link to the Rawlsian social welfare function; Social welfare function
• ISSN: 0022-0531; 1095-7235
• DOI: 10.1016/j.jet.2022.105543

Fifty years ago Eytan Sheshinski constructed a composite measure of social welfare in which income per capita enters positively, and income inequality enters negatively: social welfare was defined as a strictly increasing function of the product of income per capita and one minus the Gini coefficient. In the case of a population of two persons whose incomes are distinct, Sheshinski states that social welfare depends only on the lower income, which reduces the social welfare function to the Rawlsian social welfare function. We show that this is not true: social welfare depends on both incomes, and there is no congruence with the Rawlsian perspective.