Welfare economics is a branch of economic theory that focuses on the well-being of individuals and society. It evaluates how resources can be allocated to improve overall welfare, considering factors like efficiency and equity. The goal is to assess the economic policies and their impact on social welfare, often using tools like cost-benefit analysis. Key concepts in welfare economics include Pareto efficiency, where resources are allocated in a way that no one can be made better off without making someone else worse off, and social welfare functions, which aggregate individual preferences to evaluate societal well-being.