The Economics of Welfare¶
Pigou, A. C. (1920). The Economics of Welfare.
Cited by¶
18 citations across 18 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Cost–Benefit Analysis
- The method's modern form emerged from the interaction of early-twentieth-century welfare economics — particularly A.C. Pigou's
This sourceMacmillan. Originating exposition of externalities and corrective taxation: a tax equal to the marginal external damage internalizes a previously external social cost into the producer's private accounting.
- The method's modern form emerged from the interaction of early-twentieth-century welfare economics — particularly A.C. Pigou's
- Deadweight Loss
- Externality
- with the concept of external economies and external diseconomies, was formalized and given welfare-economics treatment by A. C. Pigou (1920)
This sourceMacmillan. Originating welfare-economics exposition of externalities and corrective taxation: a tax equal to the marginal external damage makes a previously external social cost appear inside the producer's private accounting, internalizing the externality. SUPPORTS the Pigouvian-formalization claim (146).
- with the concept of external economies and external diseconomies, was formalized and given welfare-economics treatment by A. C. Pigou (1920)
- Idealized-Substrate Fallacy
- The substrate audit is the corrective: re-enumerate the dropped terms and re-introduce each as an explicit parameter (a Pigouvian tax for unbargainable externalities, a liability rule chosen with bargaining cost in mind).
This sourceEstablishes the corrective (Pigouvian) tax for externalities that the market cannot bargain away — the deployment-stage parameter re-introduced when transaction costs make Coasean bargaining infeasible.
- The substrate audit is the corrective: re-enumerate the dropped terms and re-introduce each as an explicit parameter (a Pigouvian tax for unbargainable externalities, a liability rule chosen with bargaining cost in mind).
- Incentive
- In economics it is prices as incentives, Pigouvian taxes and subsidies, wage-and-commission structures, and patent systems rewarding R&D.
This sourceOriginating analysis of taxes and subsidies that internalize externalities by setting a per-unit charge equal to marginal external harm, flipping the marginal decider's calculus.
- In economics it is prices as incentives, Pigouvian taxes and subsidies, wage-and-commission structures, and patent systems rewarding R&D.
- Internalization
- Economics: An externality is internalized when a tax, property right, or merger makes a previously external cost or benefit appear inside the decision-maker's own accounting — a Pigouvian tax forces a polluter to carry the social cost of pollution as a private cost, so the external effect now sits inside the firm's optimization.
This sourceMacmillan. Originating exposition of externalities and corrective taxation: a tax equal to the marginal external damage makes a previously external social cost appear inside the producer's private accounting, "internalizing" the externality — supports the economic-internalization exemplar (Pigouvian tax).
- Economics: An externality is internalized when a tax, property right, or merger makes a previously external cost or benefit appear inside the decision-maker's own accounting — a Pigouvian tax forces a polluter to carry the social cost of pollution as a private cost, so the external effect now sits inside the firm's optimization.
- Price Discrimination
- Economic theory classifies price discrimination into three degrees, a taxonomy originating in Pigou's (1920) foundational work on welfare economics.
This sourceMacmillan. Originating exposition of externalities and corrective taxation: a tax equal to the marginal external damage makes a previously external social cost appear inside the producer's private accounting, "internalizing" the externality — supports the economic-internalization exemplar (Pigouvian tax).
- Economic theory classifies price discrimination into three degrees, a taxonomy originating in Pigou's (1920) foundational work on welfare economics.
- Price of Anarchy
- The bound is improvable by treating the game as a design variable: a marginal-cost toll on the narrow road shifts each driver's private cost to internalise the congestion externality, moving the equilibrium to the social optimum and driving the price of anarchy to $1$.
This sourceOriginates marginal-cost (Pigouvian) taxation to internalize a congestion externality, the toll that moves a selfish-routing equilibrium toward the social optimum.
- The bound is improvable by treating the game as a design variable: a marginal-cost toll on the narrow road shifts each driver's private cost to internalise the congestion externality, moving the equilibrium to the social optimum and driving the price of anarchy to $1$.
- Side Effect
- Externality theory's Pigouvian tradition transferred from economics into environmental regulation, tort law, and pollution-permit markets, all treating side effects as priceable externalities.
This sourceOriginates the analysis of externalities and the corrective (Pigouvian) tax that brings third-party costs onto the actor's ledger.
- Externality theory's Pigouvian tradition transferred from economics into environmental regulation, tort law, and pollution-permit markets, all treating side effects as priceable externalities.
Mechanisms¶
- Burden–Benefit Balance Sheet
- It also drags into view burdens that have been externalized onto someone neither side has any incentive to name.
This sourceAnalyzes externalized burdens imposed on people outside the parties whose private incentives govern an activity.
- It also drags into view burdens that have been externalized onto someone neither side has any incentive to name.
- Collateral-Harm Escalation Trigger
- Its strength is that it internalizes an externality
This sourceDistinguishes private from social product by including uncompensated harms imposed on third parties outside the immediate transaction.
- Its strength is that it internalizes an externality
- Min-Cost Flow Model
- Costs that resist pricing — safety, fairness, service quality, negative externalities borne by third parties — are invisible to it unless deliberately included or imposed as constraints, so a formally optimal routing can be socially or physically reckless.
This sourceShows that third-party external costs remain invisible to private optimization unless deliberately internalized.
- Costs that resist pricing — safety, fairness, service quality, negative externalities borne by third parties — are invisible to it unless deliberately included or imposed as constraints, so a formally optimal routing can be socially or physically reckless.
- Penalty, Tax, or Fee
- It is a Pigovian levy: charge the act roughly what it costs everyone else.
This sourceDevelops taxation as a remedy for divergences between private and social marginal net products, including uncompensated costs imposed on others.
- It is a Pigovian levy: charge the act roughly what it costs everyone else.
- Policy Lever Targeting
- Its strength is reach and durability: a well-calibrated, legitimately mandated instrument can move an entire population's behavior and stay in force, and price levers in particular have a clean logic — a tax on a harmful activity makes actors bear the cost they were externalizing.
This sourceExplains how taxes on harmful activities can correct a divergence between private and social costs by charging the activity for external disservices.
- Its strength is reach and durability: a well-calibrated, legitimately mandated instrument can move an entire population's behavior and stay in force, and price levers in particular have a clean logic — a tax on a harmful activity makes actors bear the cost they were externalizing.
- Pollution Pricing or Liability Rule
- Rather than banning discharge outright, the authority prices it: each permitted outfall pays a levy per unit of nutrient load, set to approximate the downstream damage a unit causes
This sourceDevelops corrective pricing of harmful externalities by relating the charge to the marginal social damage caused.
- Rather than banning discharge outright, the authority prices it: each permitted outfall pays a levy per unit of nutrient load, set to approximate the downstream damage a unit causes
- Price Incentive Adjustment
- The fee is a Pigouvian correction:
This sourceArgues that taxes can correct divergences between private and social net product caused by uncompensated harms.
- The fee is a Pigouvian correction:
- Source Tracing and Reduction Program
- Its strength is reach: it is the only control that bites on a distributed, commons-type overload where no chokepoint exists, internalizing a diffuse externality
This sourceDistinguishes private from social net product by including costs imposed on others and describes taxes that bring private incentives closer to social effects.
- Its strength is reach: it is the only control that bites on a distributed, commons-type overload where no chokepoint exists, internalizing a diffuse externality
- Tariff, Fee, or Toll Redesign
- The externality-pricing role survives as a Pigouvian charge worth keeping;
This sourceProvides the classic rationale for a corrective charge when private incentives diverge from social costs.
- The externality-pricing role survives as a Pigouvian charge worth keeping;
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Links previously used in the corpus¶
Before the registry existed this work was also linked 4 other ways.
- https://oll.libertyfund.org/titles/pigou-the-economics-of-welfare ×7
- https://digital.library.cornell.edu/catalog/chla2889309 ×4
- https://search.worldcat.org/title/2148113 ×1
- https://search.worldcat.org/title/The-economics-of-welfare/oclc/2148113 ×1
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