1 Harvard Law School and National Bureau of Economic Research. I am grateful to the John M. Olin Center for Law, Economics, and Business at Harvard Law School for financial support.

2 Ronald Dworkin, ‘What Is Equality? Part 1: Equality of Welfare,’ Philosophy and Public Affairs 10 (1981) 185-246, at 228-40; John Rawls, ‘Social Unity and Primary Goods,’ in Utilitarianism and Beyond, Amartya Sen and Bernard Williams, eds. (Cambridge: Cambridge University Press 1982) 159-85, at 168-9; Thomas Scanlon, ‘Preference and Urgency,’ Journal of Philosophy 72 (1975) 655-69, at 659 and 664-5; and Richard J. Arneson, ‘Equality and Equal Opportunity for Welfare,’ Philosophical Studies 56 (1989) 77-93. See also Amartya Sen, On Economic Inequality, enlarged edition (Oxford: Oxford University Press 1997), at 197-8.

3 See, for example, G.A. Cohen, ‘On the Currency of Egalitarian Justice,’ Ethics 99 (1989) 906-44. The alternative (hypothetical) variant is included in order to encompass views under which individuals are responsible for tastes they would have chosen even though they happen to have been born with them or had them inculcated and for tastes that, although not initially chosen, individuals could amend but have voluntarily chosen to retain. To facilitate the exposition, the remainder of this essay will refer to such embraced tastes as included within the category of what will be referred to broadly as voluntarily chosen tastes.

4 Many who discuss expensive tastes do not explicitly consider why anyone would wish to develop them. Cohen suggests that ‘there are all kinds of reasons why a person might want to develop an expensive taste’ (ibid., 923), but he does not describe any. Perhaps this relative inattention to motivations for developing expensive tastes is because of differences (elaborated in subsection III.l) between the ordinary understanding of the term, where the motivation is straightforward, and its usage as a term of art in the literature under discussion. Dworkin mentions a number of possibilities (which are included among those explored below): ‘No doubt people often put themselves in the way of new tastes carelessly, or on whim, without considering whether they will really be better off if they acquire these tastes, or even perversely, knowing that they will be worse off. Even when they think they would be better off, they might be mistaken. But I want to suppose that [the individual] is not only acting deliberately rather than inadvertently, but is also acting on the basis of the kind of judgment I said people often make when they form and change their preferences. He is trying to make his life a better life in some way’ (Dworkin, ‘What Is Equality?’ 229-30). Yet his latter statement seems to set aside all of the possibilities he initially mentions, raising the question posed in the text.

5 See, for example, Dworkin, who in ‘What Is Equality?’ refers to those ‘who need more income simply to achieve the same level of welfare as those with less expensive tastes’ (228).

6 The writers cited in n. 2 do appear to have a similar notion in mind, but, for example, Scanlon, ‘Preference and Urgency’ (659), refers to an inability to reach a ‘normal’ level of satisfaction without ‘very high’ expenditures, whereas Dworkin, quoted in the previous note, includes all who require ‘more income.’

7 A taste for a good or service that is expensive but fails to meet the definition in the text appears uninteresting for present purposes. Suppose, for example, that person 1 prefers good A, which costs $5 per unit, whereas person 2 prefers B, which costs $10 per unit. If the definition is not satisfied, then person 2 can reach (at least) the same level of well-being as person 1, such as would be possible if person 2's purchase of B produces twice the benefit (in terms of well-being or whatever is the metric) as does person l's purchase of A. Given equal resources, person 1 would purchase twice as many units of A as person 2 purchases of B, and each would be equally well off. When individuals prefer different goods, but these preference differences have no effect on their ability to achieve the same level of well-being (or some other desideratum), the issues addressed in the literature on expensive tastes appear to be moot. For further elaboration, see section 111.1.

8 Interestingly, indifference is achieved in principle only under a regime that implements fully equal welfare. As a contrast, consider a utilitarian regime. If expensive tastes are associated with a lower marginal utility of resources, such a regime would implicitly penalize individuals with expensive tastes by reducing their resource allotment, so developing expensive tastes would be doubly undesirable for them. In such a case, individuals actually would have incentives to develop inexpensive tastes (which, if everyone were to do so, would raise everyone's well-being).

9 Individuals in fact will have incentives to develop inexpensive tastes because, by definition, they allow greater satisfaction for a given level of resources. Here, the prospect of a (partial) compensatory response would reduce, but not entirely eliminate, individuals’ incentives to develop such tastes.

10 This concern is raised, for example, by Dworkin, ‘What Is Equality?’ 230.

11 In this regard, note that whether a taste is expensive in any sense depends importantly on the extent to which others share the taste: high demand, through scarcity, may bid up prices or, due to scale economies, may make possible lower-cost production.

12 An important deterrent to private insurance against mistakes (and a problem with social insurance; compare section III.2) involves the problem that individuals with insurance will take less-than-appropriate precautions. Thus, if insured against accidental development of expensive tastes (by private insurance or egalitarian compensation), individuals — though they would not seek to develop expensive tastes, as explained above — might be less careful about coming to have them accidentally.

13 This possibility is suggested by Dworkin, ‘What Is Equality?/ 230-1.

14 The text oversimplifies. For more complete accounts, see, for example, James Griffin, Well-Being: Its Meaning, Measurement, and Moral Importance (Oxford: Oxford University Press 1986); Louis Kaplow and Steven Shavell, Fairness versus Welfare (Cambridge, MA: Harvard University Press 2002), at 418-31; Martha Nussbaum and Amartya Sen, eds., The Quality of Life (Oxford: Oxford University Press 1993); Thomas M. Scanlon, ‘The Status of Well-Being/ in Tanner Lectures on Human Values, Vol. 19 (Salt Lake City: University of Utah Press 1998); and L.W. Sumner, Welfare, Happiness, and Ethics (Oxford: Oxford University Press 1996).