Determining the parameters in a social welfare function using stated preference data: an application to health

Abstract

One way in which economists might determine how best to balance the competing objectives of efficiency and equality is to specify a social welfare function (SWF). This paper looks at how the stated preferences of a sample of the general public can be used to estimate the shape of the SWF in the domain of health benefits. The results suggest that people are willing to make trade-offs between efficiency and equality and that these trade-offs are sensitive to what inequalities exist and to the groups across which those inequalities exist. [author's abstract]