Decision Analysis Models for Social Attitudes Toward Inequity

Social preferences for equity in the distribution of net benefits are not represented in a cost-benefit study by the sum of the individuals’ net present values. This paper presents two different decision analysts models for representing such an equity issue. For each model, conditions on the tradeoffs between different individuals are shown to imply that preferences can be represented by a special type of group value function. Procedures are presented by which such a group value function can be determined and used as part of a public policy evaluation.