What is welfare economics?
Q: What is welfare economics?
A: Welfare economics is a field of economics that looks at the problem of allocating resources. It uses techniques from microeconomics to assess general well-being and tries to find an allocation of productive factors as to desirability and economic efficiency within an economy, often relative to competitive general equilibrium.
Q: What are the basic units for aggregating social welfare?
A: The basic units for aggregating social welfare are individuals and their economic activities.
Q: How can social welfare be measured?
A: Social welfare can be measured either cardinally in terms of "utils" or dollars, or measured ordinarily in terms of Pareto efficiency. Money-value estimates are often used as a form of measurement where income-distribution effects are factored into the analysis or seem unlikely to change the analysis.
Q: What does the capabilities approach to welfare argue should be included in assessments?
A: The capabilities approach argues that freedom - what people are free to do or be - should be included in welfare assessments.
Q: What other classifying terms exist in welfare economics?
A: Other classifying terms in welfare economics include externalities, equity, justice, inequality, and altruism.
