Exploring social welfare functions and violation of monotonicity: an example from inequalities in health.

The social welfare function (SWF) has been used within the economics literature, to study trade-offs between equality and efficiency. These SWFs are characterised by properties determined by traditional welfare economics. One of these properties, the monotonicity principle is explored in this paper. In the context of health there may be occasions when the monotonicity principle is violated as there may be circumstances where distributional issues dominate efficiency concerns. When this is the case, conventional SWFs are not flexible enough to represent such social preferences. Therefore, we propose a SWF with an alternative specification, which is general enough to accommodate preferences that are not necessarily monotonic. A survey of the Spanish general public was undertaken to estimate preferences regarding equality in health, relative to efficiency in health. The results (with 973 usable responses) give strong support to the existence of public preferences which violate the monotonicity principle, and thus to the usefulness of the alternative specification proposed here.