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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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Public Good Provision and median voting principle

This is a question that came in one of the previous year's entrance test to a master's program in a reputed institution in my country. I am also attaching how I tackled the problem in each part of the ...
Kanooz's user avatar
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Arrow’s Impossibility Theorem Proof - Unicity of "dictator"

I have a hard time understanding completely Arrow’s Impossibility Theorem proof, even the very pedagogical one by Geanakoplos, that can be found for instance here : https://users.ssc.wisc.edu/~dquint/...
Kinta's user avatar
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A question in social choice and preference aggregation

Let $I = \{1, 2, 3\}$ denote the set of individuals and $X = [a, b]\subset \mathbb{R}^+$ with $a, b \in \mathbb{R}^+$ and $a < b$, be the set of alternatives. For each $i\in I$ and some $p_i\in X$ ...
Oliver Queen's user avatar
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Is my understanding of Arrow's dictatorship correct? The dictator is free to update her preference and the social choice will always follow her taste

Suppose $R$ is a social ordering, $f$ is the social choice function, and $R_i$ is an individual preference. A profile of individual preference is $<R_i>$. $f(<R_i>)=R$ Suppose $i=1$ is ...
dodo's user avatar
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How do I derive a SWF from mean income and an inequality index?

If one makes welfarist assumptions about the general good, and further assumes that SWFs can be fully characterized by the mean income and an inequality index, then it is possible to recover the ...
andrewH's user avatar
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3 votes
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Why doesn't the government subsidize firms on the condition that they lower prices?

Lets pretend that all production is contingent on fixed cost capital, the good or service made from this capital is sold at a price that means that demand is below what the capital has the capacity to ...
J.D G's user avatar
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To what extent does national income measure social well being [closed]

National income does not measure social well being. GDP is used to measure national income
Ivy njeri's user avatar
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Deriving a welfare function

I saw this in a paper (however, I cannot derive it): We define the growth rate of consumption as $g_{C, s} \equiv \frac{C_s}{C_{s-1}}$ and use $C_t=\left(\prod_{s=1}^t g_{C, s}\right) C_0$ to rewrite ...
Emmanuel Ameyaw's user avatar
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2 answers
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Is it possible that pensions (public or private) be actual money saved and “sent” into the future, instead of borrowed from future generations? [closed]

Is it conceivable, from a theoretical point of view, that what we pay today for our future pensions is actually invested somewhere so that we can be 100% certain that those assets will be there for us,...
tripu's user avatar
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Is there a measure of social inequality?

A measure of economic inequality in a population is the gini coefficient. Is there such a measure of social inequality as well? The social rights include labor market, the source of income, health ...
whoisit's user avatar
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Consumer Welfare vertical differentiation [SOLVED]

Suppose consumers have the standard Tirole's utility $U_A = \theta q + \alpha X_A - P$ if they buy product A and $U_0 = 0$ if they don't buy this product (where $X_A$ is the actual demand of product A)...
KArrow'sBest's user avatar
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1 answer
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Universal Limited Income

I am new here. Please pardon me for my naive question. However, I am a mathematician, so feel free to use any mathematics to model a toy situation. I would like to understand what would happen if ...
Andrea Marino's user avatar
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2 answers
170 views

Are interest rate hikes regressive?

Central banks are currently hiking interest rates to reduce aggregate demand. How is this reduction in spending distributed across the population? Specifically, what would be the shape of a graph of ...
benjimin's user avatar
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Is there a progressive response to inflation?

The conventional response to inflation is to increase central bank interest rates. This seems regressive. Is there a progressive method to stop inflation? In concrete terms, central bank interest rate ...
benjimin's user avatar
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What value does a worker whose job could be automated provide to society?

Has anyone calculated the global benefit of non-workers on government assistance and found their contribution to be less than the assistance they were provided? I'm looking for scientific studies ...
David Whittaker's user avatar
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How to empirically measure the underlying utility function for a 'max EU" SWF? Stated/revealed preferences over uncertain lotteries, or?

Direct answers, as well as pointers to the best literature and textbook treatments, as well as the names of key researchers, are appreciated. Suppose we are considering policies and transfers that ...
daaronr's user avatar
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How *should* weigh income/consumption at different income levels (esp. to the very poor vs poor) ... perhaps in a 'social welfare function'?

What is the best analysis/literature/text, that gives a theoretical justification for approaches that can be used in practice, for How we should weight income/consumption at different income levels (...
daaronr's user avatar
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What is the problem with this opportunity cost example?

The "stand-up economist" Yoram Bauman used the concept of opportunity cost to make the following joke: [S]omebody offers you a choice between a Snickers bar and a package of M&Ms. ...
pythonuser's user avatar
1 vote
2 answers
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Axiom of Minimal Liberalism & Sen's Theorem of Paretial Liberal

Suppose that a person believes that all humans are guaranteed a set of rights that cannot be taken from them in any situation or circumstance (for example, the right to marry a person of your choice, ...
Satish Rao's user avatar
3 votes
1 answer
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Question about Social Welfare Function and Social Profile

What are the meanings of a social welfare function and social profile? How are they related?
Satish Rao's user avatar
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Why the ageing population creates problems for a country to fund old-age social protection program and what solution do we have?

Senior citizens are considered as one of the vulnerable groups and therefore, they need some social protection during their old age. However, we also face the worldwide trend of an ageing population. ...
user34611's user avatar
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Social welfare in terms of preferences

How does one define a social welfare in terms of individuals’ preferences $\succeq_i$? If we have utility functions $u_i$ then a social welfare maximizing outcome $x$ is simply one that maximizes $\...
Erik M's user avatar
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Rawlsian SWF and Arrow Impossibilty Theorem

given Arrow impossibility theorem the only social welfare function that satisfies unrestricted domain, pareto and the independence of irrelevant alternatives is Dictatorship. However I was wondering ...
Hustler885's user avatar
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Are means-tested or universal programs more effective at reducing the poverty rate?

Advocates of means-tested programs frequently argue that they will remove inefficiences in the system by directing a larger proportion of the program's budget to people with a genuine need. By ...
Obie 2.0's user avatar
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Total Derivative of a Max Function: Maximizing Social Welfare Function

I'm studying public economics but my question here is purely mathematical in nature. I have a function: $$ V(1-\tau, R) = \max_zu((1-\tau)z+R,z) $$ I need to take the total derivative of this, in my ...
CorporateNationalism's user avatar
4 votes
1 answer
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In the case of externalities, does the initial allocation of rights affect the final outcome from the perspective of each party?

I think I understand the main implication of the Coase Theorem—that the outcome will be Pareto efficient regardless of the initial allocation of property rights, provided transaction costs are zero, ...
Bill's user avatar
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9 votes
3 answers
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Would a fair distribution of wealth from the super rich increase the purchasing power/life quality of the average person?

I will start by saying that I do not have any background in finance and that the following question might be very much naive, but it has been bugging me for a while now. The general narrative seems to ...
Mark's user avatar
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Theory of and studies on the long-term effect of governmental redistribution

Proposition 28 from this 2000 survey (Fuller and Geide-stevenson 2010) of American economists shows that 49% of American Economics Association members agree, and 31% agree with provisions, that it is ...
Philip Meyer's user avatar
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1 answer
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Why is the equilibrium network size can be less than the socially optimal size in networks w/ positive externalities for single system?

For Context, I am reading http://web.mit.edu/rpindyck/www/Courses/NetEx19.pdf. The chapter talks about network externalities in single system like fax machine, email, vaccinations for measles. ...
kms's user avatar
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What percentage of economists recommend basic welfare like food stamps and temporary assistance for needy families?

Is it similar to minimum wage in that opinion is approximately split down party lines, seen in this 2006 survey: https://people.uwec.edu/jamelsem/fte/fte/efl/teacher_stuff/articles/economists_agree....
Philip Meyer's user avatar
4 votes
0 answers
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What are the pros and cons of Vienna's publicly owned social housing market?

This article and this article report on Vienna's social housing market. Rent controlled since 1917 and now publicly owned. What are the relative pros and cons from an economic standpoint of such a ...
FreeMarketUnicorn's user avatar
3 votes
2 answers
684 views

How can an outcome be Pareto efficient but not Kaldor-Hicks efficient?

An policy is a Pareto improvement if it makes some people better off and no one worse off. And a policy is a Kaldor-Hicks improvement if it can be turned into a Pareto improvement by redistributing ...
Keshav Srinivasan's user avatar
4 votes
1 answer
399 views

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 ...
Nikelmouse Dylar's user avatar
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1 answer
221 views

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. ...
Nikelmouse Dylar's user avatar
1 vote
1 answer
103 views

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, ...
LHC2012's user avatar
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2 answers
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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 ...
Andy's user avatar
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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: ...
metrics24's user avatar
1 vote
1 answer
13k 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 ...
Joseph's user avatar
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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 ...
MinaThuma's user avatar
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1 answer
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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 ...
kjakeb's user avatar
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1 answer
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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 ...
Ivana's user avatar
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3 votes
3 answers
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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 ...
ConanTheGerbil's user avatar
1 vote
2 answers
71 views

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 ...
amphibient's user avatar
1 vote
0 answers
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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 ...
Jlone's user avatar
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2 votes
1 answer
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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 ...
ask's user avatar
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0 answers
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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 ...
Abbraxas's user avatar
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2 answers
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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?
Surya Shyam's user avatar
3 votes
2 answers
600 views

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 ...
Ploit88's user avatar
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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 ...
spinkus's user avatar
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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. ...
spinkus's user avatar
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