Social welfare function

In welfare economics, a social welfare function is a function that ranks social states (alternative complete descriptions of the society) as less desirable, more desirable, or indifferent for every possible pair of social states. Inputs of the function include any variables considered to affect the economic welfare of a society. In using welfare measures of persons in the society as inputs, the social welfare function is individualistic in form. One use of a social welfare function is to represent prospective patterns of collective choice as to alternative social states.

The social welfare function is analogous to the consumer theory of indifference-curve/budget constraint equilibrium for an individual, except that the social welfare function is a mapping of individual preferences or judgments of everyone in the society as to collective choices, which apply to all, whatever individual preferences are for (variable) constraints on factors of production. One point of a social welfare function is to determine how close the analogy is to an ordinal utility function for an individual with at least minimal restrictions suggested by welfare economics, including constraints on the amount of factors of production.

Welfare

Welfare is the provision of a minimal level of well-being and social support for all citizens, sometimes referred to as public aid. In most developed countries welfare is largely provided by the government, and to a lesser extent, charities, informal social groups, religious groups, and inter-governmental organizations.

The welfare state expands on this concept to include services such as universal healthcare and unemployment insurance.

History

In the Roman Empire, the first emperor Augustus provided the 'congiaria' or grain dole for citizens who could not afford to buy food every month. Social welfare was enlarged by the Emperor Trajan. Trajan's program brought acclaim from many, including Pliny the Younger. The Song dynasty government (c.1000AD in China) supported multiple programs which could be classified as social welfare, including the establishment of retirement homes, public clinics, and paupers' graveyards. According to Robert Henry Nelson, "The medieval Roman Catholic Church operated a far-reaching and comprehensive welfare system for the poor..."

Welfare economics

Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. A typical methodology begins with the derivation (or assumption) of a social welfare function, which can then be used to rank economically feasible allocations of resources in terms of the social welfare they entail. Such functions typically include measures of economic efficiency and equity, though more recent attempts to quantify social welfare have included a broader range of measures including economic freedom (as in the capability approach).

The field of welfare economics is associated with two fundamental theorems. The first states that given certain assumptions, competitive markets produce (Pareto) efficient outcomes; it captures the logic of Adam Smith's invisible hand. The second states that given further restrictions, any Pareto efficient outcome can be supported as a competitive market equilibrium. Thus a social planner could use a social welfare function to pick the most equitable efficient outcome, then use lump sum transfers followed by competitive trade to bring it about. Because of welfare economics' close ties to social choice theory, Arrow's impossibility theorem is sometimes listed as a third fundamental theorem.

Social Welfare (constituency)

The Social Welfare, formerly called Social Services, is a functional constituency in the elections for the Legislative Council of Hong Kong first created in 1985. Electors include all the registered social workers.

Return Members

Social Services (1988–95)

Social Welfare (1995 to present)

Electoral Results

2010s

2000s

1990s

1980s

References