Shared Destinies and the Measurement and of Social Risk Equity
Working Paper No. 08-W21
Thibault Gajdos, John A. Weymark, and Claudio Zoli
ABSTRACT [article]
The evaluation of social risk equity for alternative probability distributions over the potential sets of fatalities is analyzed axiomatically. Fishburn and Straffin [Equity considerations in public risks
valuation, Operations Research 37 (1999), 229-239] have identified a necessary and sufficient condition for two social risk distributions to be judged to be socially indifferent whenever their associated distributions of risk of death for individuals and for the number of fatalities are the same.
It is argued that this approach does not permit society to exhibit any concern for the number of people an individual perishes with. A weakening of the Fishburn-Straffin condition that is compatible with a concern for shared destinies is proposed.
Keywords and Phrases: Social risk evaluation, social risk equity, public risk, shared destinies
JEL Classification Numbers: D63, D81, H43