Paul E. Weston, Robert N. Townsend
Nova Science Publishers, 2009 - Business & Economics - 268 pages
Welfare economics is a branch of economics that uses microeconomic techniques to simultaneously determine allocative efficiency within an economy and the income distribution associated with it. It analyses social welfare, however measured, in terms of economic activities of the individuals that comprise the theoretical society considered. As such, individuals, with associated economic activities, are the basic units for aggregating to social welfare, whether of a group, a community, or a society, and there is no "social welfare" apart from the "welfare" associated with its individual units. Here, 'welfare' in its most general sense refers to well-being. Welfare economics typically takes individual preferences as given and stipulates a welfare improvement in Pareto efficiency terms from social state A to social state B if at least one person prefers B and no one else opposes it. There is no requirement of a unique quantitative measure of the welfare improvement implied by this. Another aspect of welfare treats income/goods distribution, including equality, as a further dimension of welfare. Social welfare refers to the overall welfare of society. With sufficiently strong assumptions, it can be specified as the summation of the welfare of all the individuals in the society. Welfare may be measured either cardinally in terms of "utils" or dollars, or measured ordinally in terms of Pareto efficiency. The cardinal method in "utils" is seldom used in pure theory today because of aggregation problems that make the meaning of the method doubtful, except on widely challenged underlying assumptions. In applied welfare economics, such as in cost-benefit analysis, money-value estimates are often used, particularly where income-distribution effects are factored into the analysis or seem unlikely to undercut the analysis. It is conventional to distinguish two sides to welfare economics: economic efficiency and income distribution. Economic efficiency is largely positive and deals with the "size of the pie". Income distribution is much more normative and deals with "dividing up the pie". Other classifying terms or problems in welfare economics include externalities, equity, justice, inequality, and altruism. This book presents the latest research in the field from around the world.
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The Institutions of Poverty
A Project Africa
The Identification and Measurement of Poverty
5 other sections not shown
Africa after-tax income analysis assets assume autarky Bifurcation diagram co(t commodities compensating variation considered consumption cooperation cycles decreasing developing distribution Doha Round double dividend dynamics ecological tax reform Effect of ETR employment subsidy endogenous energy tax rate entropy environmental equation ETR VII factor Figure firms fixed rental term fluctuations free trade equilibrium given growth model higher Hill-shaped household human capital increase individual investment JTPL labor demand large country long term Macroeconomic maximization Microfinance negative Nova Science Publishers optimal tariff rate parameter Pavlov physical capital poor population poverty line poverty measure reduces regional relative price rental housing representative agent shows small country social social welfare function steady state utility stochastic dominance subsidy rates Table technologies trade agreements transportation costs transportation income unemployment utility function variables wage mark-up wage subsidy welfare economics worker utility yields