Welfare economics in theory and practice

The book is divided into three parts - theory, policy and practice - and covers the field usually taught in applied microeconomics.

In Part One some of the neoclassical welfare economic theories and problems are discussed, and chapters on Paretian theory, the compensation principle, second-best and intertemporal comparisons are presented.

In Part Two the ideas discussed earlier are developed into more practical policies, and here some of the problems of the pure theories become apparent in applying them to realistic situations. These aspects are set against various backgrounds, including pricing and investment policy. A separate chapter assesses the theoretical and practical merits of cost-benefit analysis and
another considers how the government has developed its own public-sector policy since 1945.

Part Three uses the case-study approach to illustrate the ideas discussed earlier in the book. Four examples, chosen to highlight welfare economic insights and problems, are described and analysed, namely: the policy of development of North Sea Oil reserves; the Roskill Commission on the siting of the Third London Airport; the National Board for Prices and Incomes report on the resource costs of coal mining; and the problem of peak-load pricing.