Welfare economics is a branch of economics, which evaluates the economic prosperity and the economic welfare of the community using the microeconomic techniques and approaches in order to provide the general equilibrium in the economy between the economic efficiency and allocation of the resources. Welfare economics studies how economic policies influence the prosperity of the society. Economic welfare analyses costs and benefits and provides some theoretical principles for particular instruments of public economics.
Welfare economics implies social welfare, which is connected with economic policy, which leads to the distribution and Pareto improvement. It also studies the distribution of the resources and how it affects the well-being of the whole society. It looks for that state of economics when all the members of the community are totally satisfied. It studies the proper resource allocation which can maximize the social welfare.
Welfare economics was developed during the 20th century by such scientists as Adam Smith, Jeremy Bentham, Alfred Marshall, Vilfredo Pareto, Nickolas Kaldor, John Hick and many others. Vilfredo Pareto was a theoretician of the welfare economics. Many economists use Pareto efficiency as their ideal efficiency goal. It states that the economic situation is optimal if no individuals can be made better off without making someone else worse off. There are a lot of production and consumption equilibria which lead to the Pareto optimnum results.
There are three concepts of social welfare. The first is the paternalist concept which claims that the dictator or paternalist authority uses its own concepts about social welfare. According to the Paretian concept, social welfare is a sum of the welfare of each individual who is a member of the society. The third concept includes interpersonal comparison of utility which is made by introduction of the explicit value judgments.
In order to measure social welfare, economists use two fundamental approaches – The New Welfare Economics approach and neoclassical approach. The issues of the welfare economics can be very helpful during the creation of the public policy.
Why students face some difficulties writing on welfare economics?
Welfare economics is very important for those who study general economics and finance. Of course, during its studying students can be asked to write various writing assignments such as essay, term paper or dissertation. Welfare economics is a very complex discipline, so it can be quite difficult for some students to accomplish their academic paper properly without making serious mistakes. Even if a student knows and understands his or her topic perfectly poor grammar, punctuation and syntax can decrease your chances in getting your desired mark.
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