Welfare, Inequality & Well-Being Theories

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Abstractions about social welfare and subjective well-being, including efficiency and equity principles like Kaldor-Hicks and Pigou-Dalton, happiness paradoxes like the Easterlin paradox and hedonic treadmill, and theories of inequality and preference.

7 abstractions in this family — domain-specific abstractions that sit near one another in structural-signature space (k-means over structural-signature embeddings). Each is shown with its short description.

• Atomistic Fallacy — The inferential error of reading a within-individual relationship directly onto a group or population, ignoring the contextual variance operating only at the group level — the mirror image of the ecological fallacy.
• Easterlin Paradox — Reconcile the puzzle that richer people report more happiness at any moment yet national well-being stays flat as real income multiplies over decades — by recognising the cross-sectional gradient reflects relative income against a moving reference, not absolute income.
• Hedonic Treadmill — The pattern in which subjective well-being rises or falls after a life change but drifts back toward a temperamentally stable baseline over weeks to years, because a gain-control mechanism recalibrates affective evaluation against recent experience.
• Kaldor-Hicks Efficiency — Judge a policy efficiency-improving if the gainers could in principle fully compensate the losers and still stay ahead, reducing the whole welfare ledger to the sign of one scalar — aggregate willingness-to-pay minus willingness-to-accept — whether or not compensation is paid.
• Pigou–Dalton principle — The Pigou-Dalton transfer principle says that a rank-preserving transfer from a richer person to a poorer person must reduce measured inequality, provided their order is not reversed.
• Preference theory — Preference theory is a multidisciplinary (mainly sociological) theory developed by Catherine Hakim.
• Social dominance theory — Social dominance theory explains durable group-based hierarchy through the interaction of individual dominance orientation, hierarchy-enhancing and hierarchy-attenuating institutions, legitimizing myths, and patterned discrimination.