Download This PaperThe Measurement of Social Welfare
Osaka University Economics Discussion Paper No. 698
20 Pages Posted: 7 Sep 2007
Date Written: September 2007
Abstract
This paper derives a basic formula for the measure of social welfare, a second order approximation to the difference of the value of the Bergson-Samuelson social welfare function between the socially optimal resource allocation and the one in the present suboptimal economy. We discuss pros and cons of our approach for the measurement of welfare compared with other approaches to applied welfare economics, especially the measurement of deadweight loss.
Keywords: Social Welfare, Deadweight Loss, Measurement, Second Order Approximation
JEL Classification: H20, D61, D63
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