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A methodological approach to assess resource allocations and establish criteria for government intervention as it relates to the well-being of a community. Established as a well-defined branch of economics during the 20th century and often considered a normative branch, it uses microeconomic techniques and income distribution to simultaneously determine prosperity within an economy.
Welfare economics assesses social welfare, which refers to the overall well-being of a society. Such well-being or welfare is measured in terms of the individual economic activity of the people who make up the society. Moreover, welfare economics largely considers two concepts: income distribution and economic efficiency. Income distribution (in a country or the world) refers to how income is distributed between distinct groups of individuals. Economic efficiency refers to the unit of ...