welfaretheory
Welfare theory, or welfare economics, is a branch of economic analysis that studies the well-being of individuals in a society and how the allocation of scarce resources affects that well-being. It seeks to evaluate and compare different states of the world in terms of social welfare and to inform policy on how to improve welfare outcomes.
Core tools include social welfare functions, which aggregate individual utilities into a single measure of social
Foundational results such as the first and second welfare theorems link competitive markets to efficient allocations
Welfare theory encompasses normative perspectives, including utilitarian and Rawlsian criteria, and more general social choice rules
Measurement and criticism are central concerns. Interpersonal comparisons of utility are contentious, and welfare can diverge