The objective of welfare economics is the evaluation of the desirability of various alternative economic states from the society’s point of view.
- An economic state means a particular arrangement of various economic activities and resources of the economy.
- When different allocations are possible, it is important to know whether a particular allocation is desirable or not. Such desirability must be evaluated from the point of view of welfare of the society as a whole which depends on the individual levels of satisfaction of all the consumers of society, but any alternative may have favorable effects on some people and unfavorable effects on others, so the question arises as what is a wise choice. This question is answered to some extent by the welfare condition of the society. This welfare of society is defined and analyzed by various economists. now, we will touch upon two such important cases: