Tuesday, 7 December 1999

From "Globalization, Growth and Distribution: Framing the Questions"

By Ravi Kanbur, p. 20.

[...] suppose that the poverty numbers were not missing anything—that they actually did capture the true snapshot picture of the evolution of wellbeing at the lower tail of the distribution. Then why should rising inequality matter if poverty is falling?

The answer depends of course on what sort of welfare function we have in mind. The standard Bergson-Samuelson Social Welfare Function, where the wellbeing of each individual in the snapshot counts positively, but at a diminishing rate at the margin, would justify concern with inequality. All else equal, it would be better to have a more equal distribution for a given mean.

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