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This is the first book in welfare economics to be primarily intended for undergraduates and non-specialists. Concepts such as Pareto optimality in a market economy, the compensation criterion, and the social welfare function are explored in detail. Market failures are analysed by using different ways of measuring welfare changes. The book also examines public choice, and the issues of provision of public goods, median voter equilibrium, government failures, efficient and optimal taxation, and intergenerational equity. The three final chapters are devoted to applied welfare economics: methods for revealing people's preferences, cost-benefit analysis, and project evaluation in a risky world. The book is intended for introductory and intermediate courses in welfare economics, microeconomics, and public economics. It will also be suitable for courses in health economics, environmental economics, and cost-benefit analysis, as well as those undertaking project evaluations in government agencies and private firms.
Table of contents:
Preface; 1. Introduction; 2. Pareto optimality in a market economy; 3. The compensation principle and the social welfare function; 4. Measuring welfare changes; 5. Market failures - causes and welfare consequences; 6. Public choice; 7. A smorgasbord of further topics; 8. How to overcome the problem of preference revelation: practical methodologies; 9. Cost-benefit analysis; 10. The treatment of risk; Appendix; References.
Table of contents:
Preface; 1. Introduction; 2. Pareto optimality in a market economy; 3. The compensation principle and the social welfare function; 4. Measuring welfare changes; 5. Market failures - causes and welfare consequences; 6. Public choice; 7. A smorgasbord of further topics; 8. How to overcome the problem of preference revelation: practical methodologies; 9. Cost-benefit analysis; 10. The treatment of risk; Appendix; References.