Yew-Kwang Ng looks at pushing welfare economics towards a more complete analysis. The book covers not only the basic topics, but also advanced and new arguments. Traditional topics including Pareto optimality, welfare criteria, consumer surplus, social choice, externality and public goods are considered. In addition, Professor Ng looks at more advanced issues and discusses such new arguments as the quasi-Pareto criterion, the effects of the diamond effects on consumer surplus, economists' over-estimation of the costs of public spending, and his theory of the third best. The remarkable conclusion of treating a dollar as a dollar provides a powerful simplification of public policy formulation in general and in cost-benefit analysis in particular. The author attempts to make welfare economics more complete by discussing increasing returns, using the recent Yang-Ng framework of division of labour and by pushing welfare economics from the level of preference to that of welfare or happiness, making a reformulation of public policy necessary.
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