Opportunity-Sensitive Social Welfare
Abstract
We develop an axiomatic framework to evaluate income distributions from the perspective of an opportunity-egalitarian social planner. Building on a formal link with the literature on decision theory under ambiguity, we characterize a class of opportunity-sensitive social welfare functions based on a two-stage evaluation: the planner first computes the expected utility of income within each social type, where types consist of individuals sharing the same circumstances beyond their control, and then aggregates these type-specific welfare levels through a transformation reflecting aversion to inequality of opportunity. The evaluation is governed by a single parameter. We provide equivalent representations of the social welfare function, including a mean-divergence form that separates an efficiency term from an inequality term, and we establish an opportunity stochastic dominance criterion. Finally, we derive inequality measures that decompose overall inequality into within-group risk and between-group inequality of opportunity, providing a tractable basis for normative welfare analysis.
Cite
@article{arxiv.2603.26853,
title = {Opportunity-Sensitive Social Welfare},
author = {T. Wienand and B. Magdalou and R. Nock and P. Hufe},
journal= {arXiv preprint arXiv:2603.26853},
year = {2026}
}