Welfarism and Extra-Welfarism

Welfarism and extra-welfarism are alternative normative economic frameworks for ranking resource allocations and policies. Welfarism states that the rankings be based solely on the utility levels attained by affected individuals and is central to the dominant welfare-economic framework of neoclassical economics. Extra-welfarism that draws heavily on the capabilties approach articulated by A. Sen states that rankings should be based on more than utility information. In health economics, health status is the most common nonutility information used in extra-welfarist analysis. Extra-welfarism is, in general, more accommodating of equity concerns and uses valuations elicited from other than those directly affected by a policy. Current work in extra-welfarism focuses on better integrating Sen's capability approach into empirical work, and on developing deeper conceptual foundations regarding the roles and uses of utility and nonutility information in normative health-economic analysis.