Efficiency and Equity in Welfare Economics (Lecture Notes in Economics and Mathematical Systems Book 661)

"Increasing efficiency in generating national income and improving equity in its distribution among economic agents is at the forefront of priorities of most modern economies. This book presents a model which aims to maximize a symmetrical welfare function under certain constraints which consider both efficiency and equity, i.e. taxes and subsidies, implemented by a public authority. The model is numerically implemented and considers a set of economic agents with starting incomes that satisfy Pareto income law under various values of the alpha parameter. Also, the model implementations respect the social production function. Various experiments are presented which show how income inequality (measured by means of the Lorenz curve and, what I call, the Lorenz-Gini inequality index) and measures of poverty are sensibly reduced by redistributing national income without lowering efficiency in production. A case study, or application, of Italian personal income in 2008 is also presented."--Publisher's website Front Matter....Pages i-xii Front Matter....Pages 7-7 Overview....Pages 1-6 Social Welfare Functions and Income Distributions....Pages 9-16 Inequality and Poverty Indexes....Pages 17-28 Front Matter....Pages 29-29 Inequality, Efficiency, and the Production Sphere....Pages 31-40 Efficiency and Welfare....Pages 41-47 Information Incentives and Performance....Pages 49-51 Front Matter....Pages 53-53 A Summary Example....Pages 55-68 Implementing the Example: One Time Period....Pages 69-100 Dynamics: Many Time Periods....Pages 101-126 Final Remarks....Pages 127-131 Back Matter....Pages 133-156