Three essays in social choice and public economics

The implementation of appropriate economic policies seems to be a necessary condition to grant people equal opportunity in the access to the resources necessary to the satisfaction of their basic needs. The main goal of a substantial part of this thesis is to provide criteria for the evaluation of public policies regarding the provision and the financing of health care. The first chapter deals with a social planner willing to provide assistance to people with disabilities by distributing among them a given amount of available resources. There we construct social orderings over all conceivable allocations based on efficiency, fairness, and robustness properties. Relying on orderings gives us the possibility of deriving the appropriate public policy even if incentive constraints arise. The second chapter studies a model where agents differ in their preferences about consumption labor and health, in their (health-dependent) earning ability, and in their health disposition. There we consider the joint taxation of income and health expenditure on the basis of efficiency and fairness principles and under incentive-compatibility constraints. We derive a simple criterion for the comparison of tax policies: we prove that, for any level of health expenditure, a tax reform should always benefit agents with the lowest earning ability first. The third chapter departs from the theme underlying the previous two. There we study communication among individuals. In our model, the benefit from communication stems from the number of people one may communicate with, multiplied by a real number that constitutes the individual’s willingness to communicate. The costs are determined by the language one speaks relative to the language one learns. Utility is separable in costs and benefits and transferable.Under these assumptions we discuss mechanisms that each satisfies three of the following requirements: Assignment Efficiency, Strategy-Proofness, Individual Rationality and Feasibility. We characterize a class of Groves’ mechanisms based on its performance as regards the budget deficit it generates. We find that Groves’ mechanism suffer from certain defects, especially when the population of individuals is small. Finally, as a means of circumventing these issues we propose a mechanism that is outside the Groves’ family of mechanisms.(ECON 3) -- UCL, 201