Behavioral Economics, Happiness Surveys, and Public Policy

2016 ◽  
Vol 7 (1) ◽  
pp. 196-219 ◽  
Author(s):  
Matthew D. Adler
Keyword(s):  
Behavioral Economics ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Well Being ◽  
Subjective Well Being ◽  
Policy Tool ◽  
System 1 ◽  
Limiting Case ◽  
Rational Preferences ◽  
Recent Policy

Two important developments in recent policy analysis are behavioral economics and subjective-well-being (SWB) surveys. What is the connection between them? Some have suggested that behavioral economics strengthens the case for SWB surveys as a central policy tool, e.g., in the form of SWB-based cost-benefit analysis. This article reaches a different conclusion. Behavioral economics shows that individuals in their day-to-day, “System 1” behavior are not expected utility (EU-) rational – that they often fail to comply with the norms of rationality set forth by EU theory. Consider now that the standard preference-based view of individual well-being looks to individuals’ rational preferences. If the findings of behavioral economics are correct, an individual’s answer to a question such as “How satisfied are you with your life?” is not going to tell us much about her rational (EU-compliant) preferences. Behavioral economics, by highlighting widespread failures of EU rationality, might actually argue for an objective-good (non-preference-based) view of well-being. However (except in the limiting case of an objective-good view positing a single mentalistic good, happiness), SWB surveys will not be strong evidence of well-being in the objective-good sense. In short, SWB surveys are no “magic cure” for the genuine difficulties in inferring rational preferences and measuring well-being underscored by behavioral economics.

scholarly journals Smoking status and subjective well-being

2016 ◽  
Vol 26 (2) ◽  
pp. 195-201 ◽  
Author(s):  
Diana Weinhold ◽  
Frank J Chaloupka
Keyword(s):  
Fixed Effects ◽  
Cost Benefit Analysis ◽  
Smoking Status ◽  
Empirical Support ◽  
Cost Benefit ◽  
Well Being ◽  
Internet Survey ◽  
Subjective Well Being ◽  
Cross Sectional ◽  
Quitting Smoking

Background/aimsA debate is currently underway about the Food and Drug Administration's (FDA's) methods for evaluating antitobacco regulation. In particular, the US government requires a cost-benefit analysis for significant new regulations, which has led the FDA to consider potential lost subjective well-being (SWB) of ex-smokers as a cost of any proposed antitobacco policy. This practice, which significantly limits regulatory capacity, is premised on the assumption that there is in fact a loss in SWB among ex-smokers.MethodsWe analyse the relationship between SWB and smoking status using a longitudinal internet survey of over 5000 Dutch adults across 5 years. We control for socioeconomic, demographic and health characteristics, and in a contribution to the literature, we additionally control for two potential confounding personality characteristics, habitual use of external substances and sensitivity to stress. In another contribution, we estimate panel fixed effects models that additionally control for unobservable time-invariant characteristics.ResultsWe find strong suggestive evidence that ex-smokers do not suffer a net loss in SWB. We also find no evidence that the change in SWB of those who quit smoking under stricter tobacco control policies is different from those who quit under a more relaxed regulatory environment. Furthermore, our cross-sectional estimates suggest that the increase in SWB from quitting smoking is statistically significant and also of a meaningful magnitude.ConclusionsIn sum, we find no empirical support for the proposition that ex-smokers suffer lower net SWB compared to when they were smoking.

scholarly journals Well-Being and Public Policy

2017 ◽  
Author(s):  
John Bronsteen ◽  
Christopher Buccafusco ◽  
Jonathan Masur
Keyword(s):  
Quality Of Life ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Well Being ◽  
The United States ◽  
Psychological Research ◽  
Subjective Well Being ◽  
Benefit Analysis ◽  
Laws And Policies

Governments rely on certain basic metrics and tools to analyze prospective laws and policies and to monitor how well their countries are doing. In the United States, cost-benefit analysis (CBA) is the primary tool for analyzing prospective policies, especially with respect to administrative regulations. Similarly, Gross Domestic Product (GDP) is perhaps the most prominent metric for monitoring a country's progress. In recent years, one of the most important developments in social science has been the emergence of psychological research measuring subjective well-being (SWB) or ‘happiness’. This article first explains the way in which SWB is measured and how those measurements have been validated. It then discusses well-being analysis (WBA), which uses happiness data to analyze prospective policies more accurately than does CBA. Next, it covers the ways in which SWB data have been used to generate prices that can be used by traditional economic analysis. This is followed by a discussion of attempts to revise CBA to deal with the limitations stemming from the fact that it uses wealth to assess the effects of policy on quality of life. Finally, the article lays out the progress made towards creating an SWB-based alternative to GDP.

Happiness-Based Policy Analysis

2016 ◽  
Author(s):  
Paul Dolan ◽  
Daniel Fujiwara
Keyword(s):  
Policy Evaluation ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Well Being ◽  
Social Progress ◽  
Subjective Well Being ◽  
Benefit Analysis ◽  
Evaluation Tool ◽  
Nonmarket Goods ◽  
Over Time

Happiness data have an important role in policy. They can be used to monitor social progress over time in the same way that GDP figures are currently used. They can also be used in the subjective well-being valuation (SWV) approach to value nonmarket goods for the purposes of cost-benefit analysis, the primary policy evaluation tool in many governments. This chapter focuses on the latter of these two uses of happiness surveys, where a significant literature has grown over the last decade. It discusses the main problems associated with traditional valuation methods that rely on people’s preferences and the ways in which it has been suggested that SWV can overcome some of these difficulties. SWV also has its problems, and the chapter discusses these, provides suggestions for how results from SWV should be interpreted, and highlights where solutions to the problems in the SWV method have been proposed in the literature.

Book Reviews

2015 ◽  
Vol 53 (4) ◽  
pp. 1033-1036
Keyword(s):  
Cost Benefit Analysis ◽  
Empirical Studies ◽  
Cost Benefit ◽  
Well Being ◽  
Chicago School ◽  
Associate Professor ◽  
Law School ◽  
Hedonic Theory ◽  
The Law ◽  
Institute Of Technology

Matthew D. Adler of Duke University reviews “Happiness and the Law”, by John Bronsteen, Christopher Buccafusco, and Jonathan S. Masur. The Econlit abstract of this book begins: “Assesses how the law affects people's quality of life with a particular focus on criminal punishment and civil lawsuits. Discusses measuring happiness; well-being analysis; well-being analysis versus cost–benefit analysis; happiness and punishment; adaptation, affective forecasting, and civil litigation; some problems with preference theories and objective theories; a hedonic theory of well-being; addressing objections to the hedonic theory; and the future of happiness and the law. Bronsteen is a professor in the Loyola University Chicago School of Law. Buccafusco is an associate professor in the Chicago-Kent School of Law and Codirector of the Center for Empirical Studies of Intellectual Property at the Illinois Institute of Technology. Masur is John P. Wilson Professor of Law in the University of Chicago Law School.”

Age 21 Cost-Benefit Analysis of the Title I Chicago Child-Parent Centers

2002 ◽  
Vol 24 (4) ◽  
pp. 267-303 ◽  
Author(s):  
Arthur J. Reynolds ◽  
Judy A. Temple ◽  
Dylan L. Robertson ◽  
Emily A. Mann
Keyword(s):  
Title I ◽  
Remedial Education ◽  
Program Effectiveness ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Well Being ◽  
Economic Benefits ◽  
School Age ◽  
Program Participation ◽  
Benefit Analysis

We conducted the first cost-benefit analysis of a federally financed, comprehensive early childhood program. The Title I Chicago Child-Parent Centers are located in public schools and provide educational and family support services to low-income children from ages 3 to 9. Using data from a cohort of 1,539 program and comparison-group children born in 1980 who participate in the Chicago Longitudinal Study, measures of program participation were significantly associated with greater school achievement, higher rates of high school completion, and with significantly lower rates of remedial education services, juvenile delinquency, and child maltreatment. Economic analyses indicated that the measured and projected economic benefits of preschool participation, school-age participation, and extended program participation exceeded costs. In present-value 1998 dollars, the preschool program provided a return to society of $7.14 per dollar invested by increasing economic well-being and tax revenues, and by reducing public expenditures for remedial education, criminal justice treatment, and crime victims. The extended intervention program (4 to 6 years of participation) provided a return to society of $6.11 per dollar invested while the school-age program yielded a return of $1.66 per dollar invested. Findings demonstrate that an established public program can provide benefits that far exceed costs. Key elements of CPC program effectiveness include an instructional focus on literacy, opportunities for intensive parent involvement, and implementation by well-trained staff within a single administrative system.

scholarly journals SOCIAL INTELLIGENCE TRAINING FOR CUSTODIAL GRANDMOTHER-ADOLESCENT GRANDCHILDREN DYADS

2019 ◽  
Vol 3 (Supplement_1) ◽  
pp. S357-S357
Author(s):  
Britney A Webster ◽  
Greg Smith ◽  
Frank Infurna
Keyword(s):  
Social Intelligence ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Well Being ◽  
Positive Outcomes ◽  
Negative Consequences ◽  
Benefit Analysis ◽  
Social Competencies ◽  
Mixed Methods Approach ◽  
Mental And Physical Health

Abstract Custodial grandmothers (CGMs) and adolescent custodial grandchildren (ACG) face risk of poorer social skills and competencies due to early life adversities which have downstream negative consequences for mental and physical health. We describe an RCT examining the efficacy of an online social intelligence intervention (SII) at improving the emotional, interpersonal, and physical well-being of CGM-ACG dyads through mutual enhancement of their social competencies. Our SII is particularly valuable for these dyads because it enhances their social competencies and relationships, thereby leading to positive outcomes. Additionally, adolescence is a critical period for developing social competencies, largely through interactions with female caregivers. Our longitudinal mixed-methods approach addresses four aims: (1) Investigating if SII improves social competencies and overall well-being through both actor and partner effects; (2) Exploring moderators of SII efficacy; (3) Studying qualitatively how dyads view SII as changing their lives; and (4) Conducting a SII cost-benefit analysis. [Funded by R01AG054571]

Cost-Benefit Analysis and Social Welfare Functions

2019 ◽  
pp. 397-422
Author(s):  
Matthew D. Adler
Keyword(s):  
Social Welfare ◽  
Policy Analysis ◽  
Moral Philosophy ◽  
Social Welfare Function ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Well Being ◽  
Benefit Analysis ◽  
Important Policy ◽  
The Social

This chapter describes and compares the two most important policy-analysis methodologies in economics: cost-benefit analysis (CBA) and the social-welfare-function (SWF) framework. Both approaches are consequentialist and welfarist; both are typically combined with a preference-based view of well-being. Despite these similarities, the two methodologies differ in significant ways. CBA translates well-being impacts into monetary equivalents, and ranks outcomes according to the sum total of monetary equivalents. By contrast, the SWF framework relies upon an interpersonally comparable measure of well-being. Each possible outcome is mapped onto a list (vector) of these well-being numbers, one for each person in the population; the ranking of outcomes, then, is driven by some rule (the SWF) for ranking these well-being vectors. The utilitarian SWF and the prioritarian family of SWFs (each corresponding to well-developed positions in moral philosophy) are especially plausible. The case for using CBA rather than one of these SWFs is weak—or so the chapter argues.

scholarly journals Waste in Health Care

2019 ◽  
Vol 22 (4) ◽  
pp. 245
Author(s):  
De Micheli, A.
Keyword(s):  
Health Service ◽  
Cost Benefit Analysis ◽  
Inappropriate Prescribing ◽  
Health Spending ◽  
Health Resources ◽  
Cost Benefit ◽  
Quality Standards ◽  
Well Being ◽  
Health Interventions ◽  
Public Health Spending

Waste in a health service is every activity, behavior, asset and service that, using resources, does not produce results in terms of health, well-being or quality of life. According to the OECD, in different countries, about 20% of health expenditure makes little or no contribution to improving people’s health. Avoiding waste is theoretically easy: health interventions delivered according to a principle of appropriateness are not wasting. However, there are multiple obstacles. Waste has, in fact, different causes: inappropriateness, use of ineffective health interventions, over- and under- use of health interventions, low quality standards, medical errors, lack of innovation, misplaced and unmotivated resource allocation, administrative complexity, incorrect management of equipments, assets and services, wasted time, non-compliance with quality standards, purchasing of technologies and assets at an excessive price, incomplete design or non-completion of works, fraud and corruption. In Italy, in 2017, waste in Health Service, even if calculated on indirect and inaccurate data, was estimated at 21.59 (±20%: 17.27 – 25.91) billion euros, 17-21% of public health spending. Strategies to reduce waste are essentially two: stop doing activities that do not generate value; use, if any, equal in effectiveness and safety, but less expensive, alternatives. The implementation goes through targeted research and the culture of continuous improvement rooted in the organization and owned and applied by decision makers and every health or administrative provider. KEY WORDS health resources; allocation of resources; cost-benefit analysis; health services misuse; inappropriate prescribing

scholarly journals Economic analysis of ecosystem based adaptation and engineering options: A case study from Udayapur, Nepal

2015 ◽  
Vol 3 ◽  
pp. 35-42
Author(s):  
Dinesh Chandra Devkota ◽  
Kamal Thapa ◽  
Bhaskar Kharki
Keyword(s):  
Climate Change ◽  
Ecosystem Services ◽  
Economic Analysis ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Well Being ◽  
Benefit Analysis ◽  
High Benefit ◽  
Adaptation Options

Ecosystem services are vital to our well-being as they directly or indirectly support our survival and quality of life. But, the growing impact of climate change diminishes the benefit from ecosystem services. Therefore, identifying possible applicable adaptation options are inevitable to reduce the effect of climate change. The present research is based on a case study of Ksedi River watershed, Ajgada Village in Udaypur district of Nepal. The study demonstrates the comparison between different options to deal with flood and make a sound decision, based on economic rationale for long-term benefits. The present study compares ecosystem based adaptation options with engineering options using cost benefit analysis in order to protect village from flooding. Through stakeholder and expert consultations, ecosystem based adaptation options and economic options that are feasible in the village and catchment to mitigate the floods were listed. Economic analysis of these options and the different combinations were done using cost benefit analysis. Analysis was carried out for each of the different combination of options. Focus on ecosystem based adaptation options provide high benefit to cost return in terms of avoided damages and considering engineering options efficient in flood and erosion control in initial stage in spite of its high cost. The study suggests that reforestation in upland forest areas; plantation along riverbed and management of rangeland should be prioritized. Similarly, preparation of flood model, flood height damage curve and flood vulnerable maps specific to the site will help decision makers to implement site specific adaptation options.

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