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A Better Calculus For Regulators: From Cost-Benefit Analysis To The Social Welfare Function, Matthew D. Adler
A Better Calculus For Regulators: From Cost-Benefit Analysis To The Social Welfare Function, Matthew D. Adler
Faculty Scholarship
The “social welfare function” (SWF) is a powerful tool that originates in theoretical welfare economics and has wide application in economic scholarship, for example in optimal tax theory and environmental economics. This Article provides a comprehensive introduction to the SWF framework. It then shows how the SWF framework can be used as the basis for regulatory policy analysis, and why it improves upon cost-benefit analysis (CBA).
Two types of SWFs are especially plausible: the utilitarian SWF, which sums individual well-being numbers, and the prioritarian SWF, which gives extra weight to the well-being of the worse off. Either one of these …