Description
Book SynopsisApplied Welfare Economics uses important results in the welfare economics literature to extend a conventional Harberger cost-benefit analysis. After reviewing the properties of different welfare measures a conventional welfare equation is used to evaluate marginal policy changes in a general equilibrium economy with tax distortions. The analysis is extended to accommodate trade and income taxes, time, internationally traded goods, and non-tax distortions, including externalities, non-competitive behaviour, public goods and price quantity controls. The welfare analysis is developed in stages, and where possible is explained using diagrams, to make it more adaptable to the different institutional arrangements encountered in applied work. With this in mind, computable welfare expressions are solved using demand and supply elasticities for each good. The lump-sum transfers used in a conventional analysis to separate welfare effects are carefully examined to identify the role of the margina
Table of Contents1. Measuring welfare changes- a brief overview ; 2. Conventional shadow prices ; 3. Distributional effects ; 4. Non-tax distortions in markets ; 5. International trade ; 6. Revised shadow prices ; 7. The marginal social cost of public funds ; 8. Time and the social discount rate ; 9. Optimal commodity taxation ; 10. The optimal provision of public goods ; 11. Problems
