Aggregating Local Preferences to Guide Marginal Policy Adjustments

American Economic Review Papers and Proceedings, 103(3): 605-610

Johnson School Research Paper Series No. 1-2013

11 Pages Posted: 26 Jan 2013 Last revised: 22 Sep 2013

See all articles by Daniel J. Benjamin

Daniel J. Benjamin

Anderson School of Management; USC, Center for Economic and Social Research (CESR); National Bureau of Economic Research (NBER); Human Genetics Department, David Geffen School of Medicine

Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management; The Hebrew University of Jerusalem - Department of Economics and Center for Rationality; National Bureau of Economic Research (NBER)

Miles S. Kimball

University of Colorado Boulder; University of Michigan at Ann Arbor - Department of Economics; Center for Economic and Social Research, USC; National Bureau of Economic Research (NBER)

Nichole Szembrot

Trinity College

Multiple version iconThere are 2 versions of this paper

Date Written: January 25, 2013

Abstract

We propose a social choice rule for aggregating preferences elicited from surveys into a marginal adjustment of policy from the status quo. The mechanism is: (i) symmetric in its treatment of survey respondents; (ii) ordinal, using only the orientation of respondents’ indifference surfaces; (iii) local, using only preferences in the neighborhood of current policy; and (iv) what we call “first-order strategy-proof,” making the gains from misreporting preferences second order. The mechanism could be applied to guide policy based on how policy affects responses to subjective well-being surveys.

Keywords: subjective well-being, happiness, life satisfaction, aggregation, policy

JEL Classification: D69, H0, I38

Suggested Citation

Benjamin, Daniel J. and Heffetz, Ori and Kimball, Miles S. and Szembrot, Nichole, Aggregating Local Preferences to Guide Marginal Policy Adjustments (January 25, 2013). American Economic Review Papers and Proceedings, 103(3): 605-610, Johnson School Research Paper Series No. 1-2013, Available at SSRN: https://ssrn.com/abstract=2206908

Daniel J. Benjamin (Contact Author)

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