ABSTRACT
Utilitarian approaches conceive of collective utility as the simple sum of individual utilities: the externalities of inequity are not taken into account. Rawlsian approaches see collective utility as equal to the utility of the worst off individual. Utilitarian and Rawlsian approaches might seem irreconcilable and rooted in opposite worldviews. The chapter argues that the source of conflict lies, at least in part, in the way utility is defined. Depending on how the people define individual utility, different approaches are more appropriate. The chapter discusses relationship between equity and efficiency with some studies observing a positive tradeoff and others observing a negative tradeoff. All studies observing a positive tradeoff between equity and efficiency define efficiency as economic growth. The debate on the tradeoff between equity and efficiency has focused on the distribution of wealth among members of society.
