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Theoretical and methodological aspects of the social welfare analysis

Theoretical and methodological aspects of the social welfare analysis

Journal of Economic Regulation, , Vol. 5 (no. 4),
p. 44-61

Social welfare - the subject of study of welfare economics, in which the efficient allocation offactors of production and income is analyzed. Since the main problem of social welfare theory is to substantiate the optimum ratio of productive efficiency and social justice within the framework of the current economic system, it is advisable to determine the social welfare content as a category, its structure and growth factors, to measure the level.
In the concepts related to welfare economics, a dichotomy reveals. On the one hand, they assess the achieved level of welfare of all society members, and analyze the relations arising about its maximization; On the other hand, they prove the criterion to achieve economic optimum means of distribution and redistribution processes, but do not offer a concrete way to measure social welfare due to the impossibility of objective evaluation and comparison of individual utility of commodity bundles, i.e., the existence of value judgments.
The author provides categorical analysis of the social welfare; reveals the completeness degree of the content of social welfare in economic thought in retrospect; shows the evolution of social welfare functions based on individual utility of consumed goods.

Keywords: social welfare, social justice, economic efficiency, individual preferences, interpersonal comparisons

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