Questions tagged [social-welfare]

Social welfare is a quantitative measure of how good or bad a policy or situation is for a society, overall. It is usually obtained by somehow "aggregating" the utility functions of all the people in that society (e.g. by computing the average utility).

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Are there examples of Cost Benefit Analysis using diminishing marginal utility of income?

In Cost Benefit Analysis (CBA) constant Marginal Utility of Income (MUI) is usually assumed. This implies that a dollar received/earned is the same at low and high levels of income. In Social CBA, ...
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Do any social welfare functionals, other than maximin, meet all of Arrow's conditions plus invariance regarding ordinal level comparability?

In the literature on social welfare functionals, the only example I've seen of a functional which meets all of Arrow's conditions–––or at least utility analogues of Arrow's conditions–––plus ...
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If an ordinal-scaled utility function is defined via strictly increasing transformation, how can it represent a case of indifference?

Problem: According to Wulf Gaertner’s (2009, p. 13) A Primer in Social Choice Theory, any strictly increasing transformation of an individual’s ordinal utility function is informationally equivalent. ...
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Question regarding social welfare in the presence of externalities

I am currently learning high school level economics and I do not understand how indirect taxation may increase net social welfare in the presence of negative production externality. This is because, ...
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Providing subsidies affects Marginal Private cost but not Marginal Social Cost?

According to the theory that I'm seeing on the internet and in textbooks, when a government wants to correct underproduction due to a positive externality of production, they can decide to subsidize ...
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Numerical Question on a subsidized monopoly

Suppose a government agency has a monopoly in the provision of internet connections. The marginal cost of providing internet connections is $ \frac12$, whereas the inverse demand function is given by: ...
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103 views

Can consumer surplus be negative if a consumer is forced to make a purchase?

Assume there is a good that a producer sells for $100$. A consumer's willingness to pay for that good is $50$. However a government program forces consumers to purchase the good irrespective of their ...
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Have I found the correct Emission Price

Let's say that there is a hotel owner $(H)$ and a woodworker $(W)$ working in close proximity to one another. The woodworker produces $x$ units to sell at market at $p_{x}=6,5$. From the woodworking ...
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Question about the “No Dictator” Criterion in Arrow's Impossibility Theorem

I have a question about Arrow's impossibility theorem. I'm not sure I understand exactly what is meant by the "no dictator" criterion. Does the presence of a "dictator" mean that across all possible ...
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Why would a politician sollicit foreign investors to come and buy real estate?

In the Netherlands we have a shortage of affordable housing. Especially in urban areas, especially housing in the price ranges affordable for young people and middle and low incomes. This is pretty ...
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How much to earn to break-even throughout life [closed]

Firstly, my apologies if this isn't the right forum for this - I couldn't spot a better one! We are all born, pay taxes and die. Depending on where we live, those taxes will (hopefully) be used to ...
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Non-axiomatic definition of well-being

I first wanted to ask this on philosophy@SE but, on a second thought, decided this might be a better place. If we defined a general policy's objective being "to maximize well being and minimize ...
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Social conflicts in economic growth models

I'm highly interested in theories and models which explain how do social conflicts influence economic growth. What papers on the topic can you recommend? I was searching for some seminal and most ...
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Set of utilitarian weights

I am wondering if there are literature which studies specific properties of the set of utilitarian weights? To be more specific, when we have some axioms that characterize the preference of a social ...
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Concept of return on investment but for the state instead a firm

So, following a discussion I had today, I have the following question. If we use the return on investment (ROI) to describe the gain of an investment is there a similar concept not for a company but ...
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Universal Basic Income [closed]

In 2017 some countries have adopted the Universal Basic Income as an alternative to Welfare Payments, my question is, is it economically feasible by governments?
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Anonymity in social welfare function

Currently reading David Adler's text on distributional weights in benefit-cost analysis (https://scholarship.law.duke.edu/faculty_scholarship/3110/), I cannot manage to fully grasp the definition of ...
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Is production side (or so called “firms”) considered in “social welfare”?

When micro-economists refer to "social welfare" as measure of an outcome of a competitive equilibrium economic model, or "welfare economics" in general, is this taken to include a measure of the ...
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The social welfare of a unique general competitive equilibrium in an exchange economy

The first theorem of welfare economics states that "Every Walrasian Equilibrium (WE) is Pareto Efficient (PE)" - Microeconomic Theory Nicholson, Synder 11th ed. p477. But PE is quite a weak condition. ...
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Can we add well-being into macro model as an endogenous variable?

People talk a lot about well-being as an objective of macro policy (together with gdp growth). So if well-being is an objective, i'm wondering if we can add well-being into macro model as an ...
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Can monopolistic dead weight loss persist without government intervention? If so how?

Can monopolistic dead weight loss persist without government intervention? If so how? I am researching monopolies and find dead weight loss proposed as an evil of monopolies but i can not find any ...
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Consumer surplus with isoelastic demand

Let $q(p) = \frac{1}{p}$ denote the demand function and $p^*$ some equilibrium price. Consumer surplus is defined as \begin{align} CS = \int_{p^*}^\infty\frac{1}{p} dp= \ln(\infty) - \ln(p^*) = \...
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Private and Social Optimum with externality in this example

Firstly, I wanted to know if we may be consider as an externality, a situation such that a customer A bought a bike to a seller B, not properly checked - and which may provoke some accidents. ...
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Microeconomic Modeling of Zero-Rated content

I'm currently writing my Bachelor Thesis which discusses the Question: Does Facebook's free Basics Programm (A website which lets people in poor countries access Internet Services without paying ...
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Exercise about social planner's optimal allocation of resources

a. There are 2 cities C1 and C2. Everyone in both the cities has same concave, increasing utility function. There's only 1 good, with the social planner. How should s/he allocate it? b. Now ...
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Universal Basic Income - Menial Tasks

The Universal Basic Income scenario seems to be one where people are free to cultivate their passions. From what I could gather, the main argument for this to be the best case scenario goes something ...
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:History: Industry threatening to leave if social change takes effect

With growing inequalities and salary gap, left-wing politicians are asking for social reforms in some countries (I am thinking of France). Social reform include: equal pay for women, maternity leave,...
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What is the effect on society of me choosing to make my own shoes, food, or clothing?

This question comes from someone who suggested brushing my teeth benefits the economy because it reduces demand for dentists, lowering the price. However, when I think more generally of making my own ...
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What is the difference between utility function and characteristic function

I read that normative theories such as social welfare and game theory have as tasks computing the peoples' (average) utility function in the first case, and the characteristic function in cooperative ...
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Teaching ethics and its Economic value

Is there any literature that considers the benefits of ethical behaviour or teachings in Economics in terms of its value added to human capital? If there is no difference in value added, then is ...
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64 views

The Economical “justification” of mass killings

Throughout history people have engaged in wars and mass killings. I'm sure similar stories exist in all parts of the globe, throughout the world. So what is the story? If the world revolves around ...
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Venezuelan black market exchange

EDIT: for future reference, I found out that many businesses price accordingly to the black market rate. Trading at the official Venezuelan exchange rate is, at time of writing, about 1:10 USD:VEF. ...
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Why teach Arrow's impossibility theorem?

As part of a Macro class on social welfare, I am about to teach a very brief introduction to Arrow's impossibility theorem. The classic demonstration of this involves three voters choosing between ...
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How huge is the multiplicator of social welfare in current societies? [closed]

If you give somebody with a high consummate some extra money, most likely it will be spent. Having this spent for e.g. groceries this will make sales man, farmer, ... employed so they pay taxes are ...
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Will a Guaranteed minimum income not eventually just be crowded out by inflation?

That is, if we implement a guaranteed minimum income, would inflation not eventually rise to a point where it is essentially useless? I would expect prices to be adjusted knowing people have a certain ...
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Segal (2000) question about utility opportunity set

I am reading a JPE paper "Let's agree all dictatorship are equally bad" from Uzi Segal (2000). I have a small problem with this paper. We have the following Utility Opportunity Set (UOS): $$ S(w)=\{...
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How to find (document) the actual costs of a specific US government social program?

I had an interesting discussion today while volunteering at a food bank program. The individual I spoke with was a retired math professor who stated his research makes him believe that significant ...
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Removing a degree of freedom from relative utilitarianism

Relative utilitarianism takes utilities as reported by agents, rescales them so that, for each agent, the alternatives have utility values between 0 and 1, and then chooses an alternative to maximize ...
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Nash social welfare function with negative exponential utilities

I got one question about the Nash-SWF. Typically it is defined as the product of individual utilities, ie. $$ NSWF:=u_1(x_1) \cdot u_2(x_2) \cdot u_3(x_3) \cdot ... $$ For this to make sense, ...
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Ordinal axiomatization of proportional division

A proportional division is a kind of fair division in which a resource is divided among $n$ partners with subjective valuations, and each partner receives a share which is worth for him at least $1/n$ ...
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What effect does changing the retirement age have on employment?

I had an interesting casual discussion with a colleague the other day. A lot of western economies at least, such as New Zealand, have some form of retirement pension. It New Zealand it's called ...
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Post-redistribution Lorenz curve comparison with reranking in R

Using R, assume the population income for N= {1.. 7} looks like $X_1$= c(1,3,5,7,7,19,21). Use the Lc() function from the "ineq" package to plot the corresponding Lorenz curve $L_{X_1}(p_1)$. Next, ...
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The median as a welfare function

In an economy with several agents who have different utility functions, it is common to define a welfare function, defined as an aggregate of the utility functions of the different agents. Then we can ...
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For what demand function is a monopoly most harmful?

Consider a firm with zero marginal cost. If it gives the product for free, then all the demand is satisfied and the social welfare increases by the maximum possible amount; call this increase $W$. ...
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Ultrafilters in Social Choice Theory Literature Request

I am an undergraduate math major who is intrigued about social choice theory. I am in the early stages of planning my senior project and was wondering if anybody had some recommendations of literature ...
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Implementing Coasian bargaining to achieve social welfare

In this excellent answer, Ubiquitous elaborates on the Coasian solution as an alternative to Pigouvian subsidies. I wanted to explore and understand the solution a bit further. Consider the setting ...
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Economic Model: Incentive Compatible Market Economy that Satisfies Basic Needs

The capitalism system relies on a monetary system for exchange of goods and services. This appears to cause a large number of problems. For example, we shun those that don't have money. Is there an ...
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Where should I start to teach myself 'comparative housing and urban planning'?

For my own research, I need to teach myself the basics of the research areas of Dr Morrison, Department of Land Economy, U.of Cambridge. Sorry if this is the wrong SE site, but the title 'Land Economy'...
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Why is the derivative of this SWF non-positive?

This question is related to the development of The Joint Giving Theorem (by S. Kolm). There are two types of agents: benevolent and beneficiaries. Benevolents' preferences are represented by ...
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Policy relevance of the optimal taxation given uncertainty about social welfare specification

One common criticism in the optimal taxation literature is the specification of the social welfare function. The optimal taxation literature (I have the Mirrlees framework in mind) relies on first ...