On the Evaluation of Behaviorally Informed Interventions
15 Pages Posted: 1 Dec 2021
Date Written: November 25, 2021
In evaluating behaviorally informed interventions, policymakers should consider both their welfare effects (including, for example, their potentially negative effects on subjective well-being) and their effects on distributive justice (including, for example, their potentially negative effects on those at the bottom of the economic ladder). Four specific questions are relevant: (1) What are the aggregate effects on social welfare? For purposes of evaluation, it is tempting to focus on increases in participation rates or on cost-effectiveness. The welfare question is much more important, though it raises serious normative, conceptual, and empirical challenges. (2) Who is likely to be helped and who is likely to be hurt? This is a plea for a distributional analysis of the effects of behaviorally informed interventions. (3) What are the expected effects on the least well-off? It is important to ask whether the relevant interventions help or hurt those who have the least, defined in terms of welfare, a point that is connected with “prioritarianism.” (4) Do the benefits to those who are helped exceed the costs to those who are hurt? If the gainers gain more than the losers lose, we have a strong point in favor of the intervention. But the point might not be decisive if, for example, the gainers are well-off to begin with, and the losers are not. The four questions are meant as an objection to efforts to evaluate behaviorally informed interventions in terms of (for example) effects on participation rates; as a plea for analysis of the distributive effects of such interventions; and as a plea for specification and investigation of their welfare effects.
Keywords: nudges, welfare, distribution, default rules
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