Direct answers, as well as pointers to the best literature and textbook treatments, as well as the names of key researchers, are appreciated.
Suppose we are considering policies and transfers that require us to weigh income (consumption) tradeoffs between the poor & the very poor?
E.g., 'is giving 100 USD/year to someone earning 300 USD/year valued more than 1000 USD/year for someone earning 2000 USD/year'?
Suppose we do this with a 'sum of individual utilities' welfare function, perhaps with a 'veil of ignorance' justification.
How then, do we measure people's values/tradeoffs to make specific calculations for this? How do we actually measure and aggregate (individual and social) preferences over income in different states?
- With hypothetical lottery choices under an Expected Utility VnM framework?
- Comparing stated values of a QALY across income?
- Through 'hedonic check-ins' or stated happiness for people with different income levels (perhaps quantifying the relative benefits by exploiting heterogeneity?)
- Through some actual incentivized choice experiment?