75575 - Economics of Welfare

Course Unit Page


This teaching activity contributes to the achievement of the Sustainable Development Goals of the UN 2030 Agenda.

Good health and well-being Decent work and economic growth Reduced inequalities Peace, justice and strong institutions

Academic Year 2021/2022

Learning outcomes

The course provides the basic theoretical models which can be used to define economic welfare, to provide adequate measures thereof, and to assess the welfare effects of policy choices. Specific applications will be discussed with reference to the welfare implications of sustainability issues, including the definition of welfare indices, taxation, poverty, and social discount rates.

Course contents

  1. Introduction: General perspectives on the economics of welfare (positive and normative ideas, utilitarianism and beyond, economics and justice, economics of happiness); welfare and economic welfare.

  2. From welfare to economic welfare: utilitarianism, efficiency and social decision rules.

  3. Basic models: Pareto optimality and the two fundamental theorems; the second best theorem; externalities.

  4. Applications: (a) The population problem; (b) Taxation; (c) Topics in welfare and sustainability.


Basic theory is covered by any microeconomics handbook, like H.Varian, Microeconomic Analysis, Norton (any edition later than the second will do) or, at a more advanced level, A.Mas-Colell, M.D.Whinston and J.R.Green, Microeconomic Theory, Oxford University Press, 1995. Further references and a list of readings will be provided in class.

Teaching methods

This is a taught course with lectures

Assessment methods

The exam consists of an oral discussion of the material covered in class; it will possibly held online, depending on the overall health situation. Students are required to register in advance for the exam through AlmaEsami according to the general rules of the School of Economics and Management. Grading is on a 30 point basis, with minimum pass grade 18/30 (18-23: sufficient; 24-27: good; 28-30: very good; 30 plus distinction: excellent). Depending on the number and willingness of students, classwork and essay writing may be organized, the assessment of which will be worth up to one third of the final grade.

Teaching tools

Most lectures will involve topics presentation by the teacher and class discussions. Handouts will be available for students.

Office hours

See the website of Corrado Benassi