Fairness and Equity via Concepts of Multi-Criteria Decision Analysis

Lootsma, F.A., Ramanathan, R., & Schuijt, H. (1996). Fairness and Equity via Concepts of Multi-Criteria Decision Analysis. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-96-137

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Abstract

We briefly discuss principles of fairness and equity in order to incorporate them in a mathematical method for the allocation of benefits or costs (the output) in a distribution problem, on the basis of the effort, the strength or the needs (the input) of the respective parties. Usually, input and output are multi-dimensional, and proportionality seems to be the leading principle. Therefore we employ several algorithmic ideas of Multi-Criteria Decision Analysis in order to support the solution of distribution problems, in particular the ideas underlying the Multiplicative AHP which was designed to process ratio information. We extend the method in order to cover the principles of progressivity, priority, and parity as well. Two examples, (a) the establishment of the member state contributions to the European Union, and (b) the allocation of seats in the European Parliament to the member states, show that the proposed method produces contributions and allocations with a higher degree of fairness and equity than the solutions adopted so far.

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