Effects of Charity on Social Welfare: a Theoretical Analysis

Abstract

Using a social welfare function approach, this study theoretically demonstrates that charity and selfless service contribute positively to the welfare of the society without reducing welfare of any individual and thus they invariably lead to Pareto-improvement in social welfare. In other words, a society, regardless of its current level of development, can attain a higher level of subjective wellbeing if the affluent class voluntarily undertakes the service activities that benefit the needy.