CAN EQUITY BE PURCHASED AT THE EXPENSE OF EFFICIENCY - AN AXIOMATIC INQUIRY

Assume the restricted domain of classical welfare economics. The Pareto rule ranks x strictly above y if and only if everyone strictly prefers x to y. Suppose the social welfare function f{hook} satisfies: 1. Nonimposition. 2. Independence of irrelevant alternatives. 3. Continuity and quasitransitivity of social preference. 4. Minimal equity (there is at least one situation in which at least one social optimum gives each individual a positive amount of at least one commodity). Then f{hook} agrees with the Pareto rule except perhaps for comparisons in which someone is assigned the zero vector, and the Pareto rule is at least as decisive as f{hook} overall. © 1990.