Assessment criteria for aggregate social welfare

Abstract

Subject. The article addresses the history of development and provides the criticism of existing criteria for aggregate social welfare (on the simple exchange economy (the Edgeworth box) case). Objectives. The purpose is to develop a unique classification of criteria to assess the aggregate social welfare. Methods. The study draws on methods of logical and mathematical analysis. Results. The paper considers strong, strict and weak versions of the Pareto, Kaldor, Hicks, Scitovsky, and Samuelson criteria, introduces the notion of equivalence and constructs orderings by Pareto, Kaldor, Hicks, Scitovsky, and Samuelson. The Pareto and Samuelson's criteria are transitive, however, not complete. The Kaldor, Hicks, Scitovsky citeria are not transitive in the general case. Conclusions. The lack of an ideal social welfare criterion is the consequence of the Arrow’s Impossibility Theorem, and of the group of impossibility theorems in economics. It is necessary to develop new approaches to the assessment of aggregate welfare.