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

Daniel J. Benjamin

USC, Center for Economic and Social Research (CESR); National Bureau of Economic Research (NBER)

Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management; Hebrew University of Jerusalem; National Bureau of Economic Research (NBER)

Miles S. Kimball

University of Michigan at Ann Arbor - Department of Economics; University of Colorado Boulder; 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)

USC, Center for Economic and Social Research (CESR) ( email )

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National Bureau of Economic Research (NBER) ( email )

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Ori Heffetz

Cornell University - S.C. Johnson Graduate School of Management ( email )

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Hebrew University of Jerusalem

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Israel

National Bureau of Economic Research (NBER)

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HOME PAGE: http://www.nber.org/~heffetz

Miles S. Kimball

University of Michigan at Ann Arbor - Department of Economics ( email )

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University of Colorado Boulder ( email )

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303.492.8295 (Phone)
303.492.8960 (Fax)

HOME PAGE: http://www.colorado.edu/Economics/people/faculty/kimball.html

Center for Economic and Social Research, USC ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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