This outstanding text, a follow-up to the authors' award-winning 1982 text, provides a thorough treatment of economic welfare theory and develops a complete theoretical and empirical framework for applied project and policy evaluation. The authors illustrate how this theory can be used to develop policy analysis from both theory and estimation in a variety of areas including: international trade, the economics of technological change, agricultural economics, the economics of information, environmental economics, and the economics of extractive and renewable natural resources. Building on willingness-to-pay (WTP) measures as the foundation for applied welfare economics, the authors develop measures for firms and households where households are viewed as both consumers and owner/sellers of resources. Possibilities are presented for approximating WTP with consumer surplus, measuring WTP exactly subject to errors in existing econometric work, and using duality theory to specify econometric equations consistent with theory.
Later chapters cover specific areas of welfare measurement under imperfect competition, uncertainty, incomplete information, externalities, and dynamic considerations. Applications are considered explicitly for policy issues related to information, international trade, the environment, agriculture, and other natural resource issues.
The Welfare Economics of Public Policy is ideal for graduate and undergraduate courses in applied welfare economics, public policy, agricultural policy, and environmental economics and provides an essential reference for practitioners of applied welfare economics.
Contents:
Preface
1. Introduction
2. Pareto Optimality and the Pareto Criterion
3. The Compensation Principle and the Welfare Function
4. Welfare Measurement for the Producer
Appendix to Chapter 4: Alternative Measures of Producer Welfare in Factor and Product Markets
5. Consumer Surplus and Consumer Welfare
Appendix to Chapter 5: Nonuniqueness of Consumer Surplus
6. Willingness to Pay and Consumer Welfare
Appendix to Chapter 6: Welfare Measurement for Consumers
7. Factor Supply and Factor Owner Welfare
Appendix to Chapter 7: Welfare Measurement for Factor Owners
8. Aggregation and Economic Welfare Analysis of Market-Oriented Policies
Appendix to Chapter 8: Measurement of Aggregate Market Welfare
9. Multimarket Analysis and General Equilibrium Considerations
Appendix to Chapter 9: Welfare Measures for Multimarket Equilibrium
10. The Welfare Economics of Market Structure with Applications to International Trade
11. The Welfare Economics of Information with Applications to Advertising and Information Policy
Appendix to Chapter 11: Measuring the Welfare Effects of Quality and Information
12. Stochastic Welfare Economics with Applications to Agricultural Policy Analysis
Appendix to Chapter 12: Producer Welfare Measurement under Risk
13. Nonmarket Welfare Measurement with Applications to Environmental Economic Policy
14. Intertemporal Considerations in Cost Benefit Analysis with Applications to Natural Resource Economics
Appendix to Chapter 14: Intertemporal Welfare Analysis with Investment in Producer Capital and Consumer Durables
15. Conclusions and Further Considerations
Bibliography
Index
