Welfarism Vs. Extra-Welfarism
Posted: 22 Jun 2007
'Extra-welfarism' is receiving increased attention in health economics. Still, there appears to be little consensus on what extra-welfarism exactly involves or what distinguishes it from 'welfarist economics'. Partly, this seems related to a lack of consensus on what defines welfarism. In this presentation, therefore, we seek to identify the characteristics of each school of thought in order to make a systematic comparison of the ways in which they evaluate alternative social states, which is the aim of both streams. We identify four main ways in which extra-welfarism can differ from welfarist economics.
First, and the most characteristic difference between the two streams, is that extra-welfarism may abandon the tenet of welfarism, that is that alternative states should be judged exclusively on the basis of utility information. In extra-welfarism, other outcomes may be considered to be of interest. In the field of health economics, the focus seems to be on health, but in other jurisdictions it may involve other outcomes of interest (like schooling or income). This difference is closely related to Sen's advocacy of capabilities as appropriate outcomes.
Second, the source of valuation may differ between the schools. Whereas under welfarist economics this is normally the affected individual, under extra-welfarism on normative grounds, a variety of sources may be selected, in some ways perhaps making extra-welfarism a more paternalistic stream. Third, extra-welfarism may permit the weighting of outcomes according to principles that need not strictly be preference-based and may pertain to non-utility characteristics of people. Finally, whereas interpersonal comparisons are often deemed impossible within welfarism, extra-welfarism permits interpersonal comparisons of welfare in a variety of dimensions, like health, facilitating policy.
Therefore, there are substantive differences between the two alternative schools of thought and more clarity in this respect may further the debate in this area.
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