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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1answer
309 views

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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419 views

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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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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3answers
234 views

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 ...
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1answer
99 views

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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3answers
4k views

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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1answer
93 views

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 ...
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1answer
219 views

Mechanisms to incentivise social welfare

Suppose there is a set of agents causing loss $l_i$ to themselves and aggregate loss $L$ to the society, both of which can be minimised by their investments $c_i$. The social planner who is concerned ...
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1answer
281 views

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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353 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 ...
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125 views

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, ...
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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 ...
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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 ...
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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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59 views

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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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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184 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 ...
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1answer
103 views

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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2answers
346 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 ...
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2answers
240 views

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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1answer
40 views

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 ...
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4answers
140 views

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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1answer
50 views

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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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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1answer
103 views

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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3answers
113 views

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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2answers
406 views

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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1answer
32 views

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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1answer
213 views

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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1answer
51 views

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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1answer
105 views

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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1answer
40 views

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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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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464 views

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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2answers
63 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 ...
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1answer
7k 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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1answer
67 views

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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1answer
54 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, ...
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1answer
45 views

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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1answer
41 views

: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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1answer
149 views

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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1answer
307 views

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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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. ...
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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 ...
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46 views

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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0answers
48 views

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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0answers
50 views

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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490 views

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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425 views

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 assume ...
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74 views

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 ...