What are the different types of welfare criteria used in welfare economics?

In welfare economics, various criteria are used to evaluate and measure the overall welfare or well-being of individuals in society. The different types of welfare criteria commonly used in welfare economics include:

1. Pareto Efficiency: This criterion focuses on the allocation of resources in a way that no individual can be made better off without making someone else worse off. A situation is considered Pareto efficient if it is not possible to reallocate resources to make at least one person better off without making someone else worse off.

2. Kaldor-Hicks Efficiency: Unlike Pareto efficiency, Kaldor-Hicks efficiency allows for potential trade-offs between individuals. It considers a situation efficient if the gains of winners from a policy change exceed the losses of losers, even if compensation is not fully realized. This criterion takes into account the possibility of redistributing resources to make everyone better off.

3. Utilitarianism: This criterion focuses on maximizing overall social welfare or utility. It suggests that the best policy or allocation of resources is the one that maximizes the total happiness or well-being of all individuals in society. Utilitarianism often involves aggregating individual utilities to determine the overall social welfare.

4. Rawlsian Maximin Principle: This criterion emphasizes the well-being of the worst-off individuals in society. According to the Rawlsian approach, the best policy or allocation of resources is the one that maximizes the welfare of the least advantaged members of society. It prioritizes reducing inequality and ensuring a minimum level of well-being for all individuals.

5. Sen's Capability Approach: This criterion focuses on the capabilities and freedoms that individuals have to lead a fulfilling life. It considers not only the resources available to individuals but also their ability to use those resources to achieve their goals and aspirations. Sen's approach emphasizes the importance of enhancing people's capabilities and freedoms to improve overall welfare.

These different welfare criteria provide different perspectives on evaluating and measuring welfare in economics. Each criterion has its strengths and weaknesses, and the choice of criteria depends on the specific context and values of society.