Introduction to Modern Welfare Economics
Cover -- Half-title -- Title -- Copyright -- Contents -- Preface -- 1 Introduction -- Welfare economics -- The market economy, market failures, and government failures -- Outline and summary of the rest of this book -- Utility versus welfare -- The Pareto principle -- Pareto optimality and the market economy -- Compensation criteria -- Social welfare functions -- Consumer and producer surplus measures -- Market failures -- Social choice -- Applied welfare economics -- 2 Pareto optimality in a market economy -- 2.1 The Pareto criterion -- 2.2 General equilibrium in a market economy -- 2.3 The Pareto criterion in a market economy -- 2.4 A concluding remark -- 3 The compensation principle and the social welfare function -- 3.1 The compensation principle -- 3.2 The social welfare function -- 3.3 Measurability and comparability -- 3.4 The optimal distribution of welfare and income -- 3.5 Concluding remarks -- 4 Measuring welfare changes -- 4.1 Consumer surplus -- 4.2 Multiple price changes -- 4.3 Aggregation of consumer surplus -- 4.4 Compensating and equivalent variations -- 4.5 Some further results -- 4.6 Welfare measures for firms -- 4.7 Concluding remarks -- 5 Market failures - causes and welfare consequences -- 5.1 Decreasing average costs -- 5.2 Monopoly -- 5.3 Public goods -- 5.4 External effects -- 5.5 Market imbalances -- 5.6 Other sources of market failures -- 5.7 Market failures as a prisoner's dilemma -- 5.8 Concluding remarks -- 6 Public choice -- 6.1 Efficient provision of public goods -- 6.2 The typical taxpayer -- 6.3 Lindahl equilibrium -- 6.4 The median voter equilibrium -- 6.5 What do voters and bureaucrats maximize? -- 7 A 'Smorgasbord' of further topics -- 7.1 Property rights, policy instruments, and the depletion of stratospheric ozone -- 7.2 Coase's theorem -- 7.3 Local public goods -- 7.4 Pareto-efficient and optimal taxation