THE INTRANSITIVITY OF CERTAIN CRITERIA USED IN WELFARE ECONOMICS

In this paper it is shown that neither the Scitovsky nor the double index number criterion for an increase in welfare is transitive. The consistent use of either could therefore lead to inconsistent judgements. The relationship of these results to Arrow's general theorem concerning the impossibility of constructing a social welfare function satisfying certain restrictions is discussed. The author feels sure that many of these results must be familiar to individual economists, but they do not appear to be generally known.