Policy Optimization by Lexigographic Preference Ordering
Posted: 26 Feb 2008
A lexicographic preference ordering of policy objectives is used to define the policymaker's choice among alternatives. It is shown how the constrained multiple goal problem can be placed in a one-to-one relationship with multidimensional utility analysis. The method is applied to a model of the Dutch economy and it is shown that is has good potential as a policy optimization method, its strengths being its ease of use and the quality of its results.
Keywords: policy optimization, lexicographic ordering
JEL Classification: C61, D78, D81, E61
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