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Welfare economics is a branch or subfield of economics that concentrates on how resources are allocated to maximize welfare. Defined as the utility or satisfaction derived from consumption or any other economic activity such as resource allocation, trade, or distribution, human welfare remains at the heart of welfare economics. While the terms utility and satisfaction are abstract, helping mostly to make theoretical postulates, welfare economics instructs us to understand them as individual preferences which can be easily measured or, at the least, rank ordered. The notion of welfare here bifurcates into social and individual welfare with the former understood as the aggregate of the latter. Economic well-being of individuals is at the center of individual welfare, whereas economic efficiency and general equilibrium are at the center of social welfare which is typically discussed at the level of economy. Theoretically grounded on microeconomics,...
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References
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Waglé, U.R., Koirala, B. (2014). Welfare Economics. In: Michalos, A.C. (eds) Encyclopedia of Quality of Life and Well-Being Research. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-0753-5_3209
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DOI: https://doi.org/10.1007/978-94-007-0753-5_3209
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