Economics Commons^™

Happiness Surveys And Public Policy: What’S The Use?, Matthew D. Adler

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This Article provides a comprehensive, critical overview of proposals to use happiness surveys for steering public policy. Happiness or “subjective well-being” surveys ask individuals to rate their present happiness, life-satisfaction, affective state, etc. A massive literature now engages in such surveys or correlates survey responses with individual attributes. And, increasingly, scholars argue for the policy relevance of happiness data: in particular, as a basis for calculating aggregates such as “gross national happiness,” or for calculating monetary equivalents for non-market goods based on coefficients in a happiness equation.

But is individual well-being equivalent to happiness? The happiness literature tends to blur …

The Social Value Of Mortality Risk Reduction: Vsl Vs. The Social Welfare Function Approach, Matthew D. Adler, James K. Hammitt, Nicholas Treich

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We examine how different welfarist frameworks evaluate the social value of mortality risk-reduction. These frameworks include classical, distributively unweighted cost-benefit analysis—i.e., the “value per statistical life” (VSL) approach—and three benchmark social welfare functions (SWF): a utilitarian SWF, an ex ante prioritarian SWF, and an ex post prioritarian SWF. We examine the conditions on individual utility and on the SWF under which these frameworks display the following five properties: i) wealth sensitivity, ii) sensitivity to baseline risk, iii) equal value of risk reduction, iv) preference for risk equity, and v) catastrophe aversion. We show that the particular manner in which VSL …

Harsanyi 2.0, Matthew D. Adler

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How should we make interpersonal comparisons of well-being levels and differences? One branch of welfare economics eschews such comparisons, which are seen as impossible or unknowable; normative evaluation is based upon criteria such as Pareto or Kaldor-Hicks efficiency that require no interpersonal comparability. A different branch of welfare economics, for example optimal tax theory, uses “social welfare functions” (SWFs) to compare social states and governmental policies. Interpersonally comparable utility numbers provide the input for SWFs. But this scholarly tradition has never adequately explained the basis for these numbers.

John Harsanyi, in his work on so-called “extended preferences,” advanced a fruitful …

Regulatory Theory, Matthew D. Adler

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This chapter reviews a range of topics connected to the justification of government regulation, including: the definition of “regulation”; welfarism, Kaldor-Hicks efficiency, and the Pareto principles; the fundamental theorems of welfare economics and the “market failure” framework for justifying regulation, which identifies different ways in which the conditions for those theorems may fail to hold true (such as externalities, public goods, monopoly power, and imperfect information); the Coase theorem; and the different forms of regulation.