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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpubeco.2007.03.004 Byline: Indraneel Dasgupta (a), Ravi Kanbur (b) Keywords: Community; Public goods; Inequality; Distribution; Class conflict; Ethnic conflict Abstract: We investigate how vertical unity within a community interacts with horizontal class divisions of an unequal income distribution. Community is conceptualized in terms of a public good to which all those in the community have equal access, but from which outsiders are excluded. We formulate the idea of redistributive tension, or class antagonism, in terms of the costs that poorer individuals would be willing to impose on the rich, to achieve a given gain in personal income. Our conclusion is that the nominal distribution of income could give a misleading picture of tensions in society, both within and across communities. Ideologies of community solidarity may well trump those of class solidarity because of the implicit sharing of community resources brought about by community-specific public goods. Greater economic mobility of particular types may actually exacerbate class tensions instead of attenuating them. We illustrate our theoretical results with a discussion of a number of historical episodes of shifting class tensions and alliances. Author Affiliation: (a) School of Economics, University of Nottingham, Nottingham NG7 2RD, UK (b) Department of Economics, Cornell University, Ithaca NY 14853-7801, USA Article History: Received 24 July 2006; Revised 7 March 2007; Accepted 12 March 2007 Article Note: (footnote) [star] We thank Marc Bilodeau, Richard Cornes, Una Osili, Prasanta Pattanaik, Daniel Seidmann, Richard Steinberg, Yongsheng Xu and seminar audiences at UC Riverside, Georgia State, IUPU Indianapolis, Jadavpur, Caen, CORE, Cornell, IDS Kolkata and JNU Delhi for helpful discussions, and The Pew Charitable Trusts for financial support. We are also indebted to two anonymous referees for suggesting a number of improvements.

The problem of aggregating demand across customers similar in terms of wealth and varying in terms of consumption is studied. The structure of a stochastic demand function is examined to represent this aggregate demand. The relation between the weak axiom of stochastic revealed preference (WASRP) and the weak axiom of revealed preference (WARP) is investigated.

Increased demand for women's labor can shift intra-household income toward men, thus reducing women's welfare. The framework for this research assumes agents with perfect foresight and the underground economy serving as a gateway to the formal sector.

This paper examines the implications of income redistribution from men to women for the welfare of married women and children. We develop a Cournot model of a two-person household where agents provide market labor and allocate their spending between a private consumption good and goods for children. We show that, under plausible restrictions on individual preferences, small redistributions to married women reduce their welfare. This happens because the income redistribution induces men to reduce their own spending on children by more than the amount redistributed. A relative increase in women's independent earnings may however improve children's welfare. JEL classification: H23; H31; I38; J16 Keywords: Cournot model of household; Intra-household distribution; Inter-gender redistribution

A study was conducted to analyze and extend the deterministic revealed preference theory of consumers' behavior to support stochastic choices. A restriction on stochastic choices was integrated. It was characterized by a stochastic counterpart of the weak axiom of revealed preference. It also helped determine stochastic versions of nonpositivity of the own substitution effect and demand theorem.

We explore the relation between two ‘rationality conditions’ for stochastic choice behavior: regularity and the weak axiom of stochastic revealed preference (WASRP). We show that WASRP implies regularity, but the converse is not true. We identify a restriction on the domain of the stochastic choice function, which suffices for regularity to imply WASRP. When the universal set of alternatives is finite, this restriction is also necessary for regularity to imply WASRP. Furthermore, we identify necessary and sufficient domain restrictions for regularity to imply WASRP, when the universal set of alternatives is finite and stochastic choice functions are all degenerate. Results in the traditional, deterministic, framework regarding the relation between Chernoff’s condition and the weak axiom of revealed preference follow as special cases. Thus, general conditions are established, under which regularity can substitute for WASRP as the axiomatic foundation for a theory of choice behavior. [ABSTRACT FROM AUTHOR]