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Describe the challenges with the aggregation of utility

Describe the challenges with the aggregation of utility

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The aggregation of utility is the total utility that is gained in a society from making a certain choice in an economy. The aggregate utility is the total of the utility gains for those positively impacted, minus the total disutility experienced by those negatively impacted with the choice. However there are many challenges with the aggregate utility approach.

-- In the aggregation of the individual utilities there is a need of some weights on them, for the system to be fair, therefore we require some magnitudes. However it is quite a tough task, as it is difficult to measure the absolute magnitudes of utility.

-- Besides the mechanical issues of achieving a ordering in preference, there is the issue of existence of an unbiased ordering.

-- Some classical economists argued in an aggregate utility approach for the social satisfaction maximization, an equal wealth distribution is the best approach because the utility loss to those who lose some wealth, through an equal distribution, exceeds what is made up for by the gain in utility to those who receive the society’s wealth share through equal distribution. But it is also argued that the likely loss of overall social production due to the equal distribution of wealth make this approach not applicable in reality

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