This paper explores the application of conventional methods in applied welfare economics to situations where consumers face discrete choices, rather than continuous ones. It focuses on computing the excess burden of taxation and evaluating quality changes, particularly in the context of stochastic utility models such as probit and logit analysis. The authors provide rigorous guidelines for conducting applied welfare economics in discrete choice scenarios, addressing issues such as the validity of tools in discrete choice situations, the computation of compensating variations, and the handling of discrete choices in demand functions. The paper also discusses the Slutsky equation and its approximation for discrete goods, and presents formulas for calculating excess burdens under different economic assumptions. Finally, it applies these methods to quality changes and stochastic utility models, demonstrating how to evaluate welfare impacts in these contexts.This paper explores the application of conventional methods in applied welfare economics to situations where consumers face discrete choices, rather than continuous ones. It focuses on computing the excess burden of taxation and evaluating quality changes, particularly in the context of stochastic utility models such as probit and logit analysis. The authors provide rigorous guidelines for conducting applied welfare economics in discrete choice scenarios, addressing issues such as the validity of tools in discrete choice situations, the computation of compensating variations, and the handling of discrete choices in demand functions. The paper also discusses the Slutsky equation and its approximation for discrete goods, and presents formulas for calculating excess burdens under different economic assumptions. Finally, it applies these methods to quality changes and stochastic utility models, demonstrating how to evaluate welfare impacts in these contexts.