An Alternative Approach to Aggregate Surplus Analysis
Kingston, Ontario, Canada
David E. Wildasin Department of Economics Indiana University Bloomington, IN 47405 USA
This paper suggests a dual to the many-person applied welfare economics problem with constraints on lump-sum redistribution. The dual has the property of minimizing an aggregator function over individual income transfers. The properties of the aggregator are dependent upon the resource costs of redistribution and not upon the distributional preferences embodied in the social welfare function. An interpretation of the dual problem in terms of consumer surplus is offered.