Individualistic Welfare Analysis in the Age of Behavioral Science

7 Pages Posted: 15 Oct 2018

See all articles by Michael Woodford

Michael Woodford

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

Date Written: September 14, 2018

Abstract

Experimental demonstration of systematic errors and biases in human choice behavior might seem to undermine the conceptual basis of the individualistic approach to welfare analysis, in which people’s interests are inferred from the choices that they are observed to make. This essay argues that one need not give up on individualistic welfare analysis, and discusses two ways in which empirical studies can seek to infer people’s true interests, while recognizing that people do not always choose the outcome that is best for them under all circumstances.

Keywords: welfare analysis, behavioral science, human choice behavior, individualism

Suggested Citation

Woodford, Michael, Individualistic Welfare Analysis in the Age of Behavioral Science (September 14, 2018). Capitalism and Society: Vol. 13: Iss. 1, Article 3. Available at SSRN: https://ssrn.com/abstract=3263471

Michael Woodford (Contact Author)

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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