Welfare Now

Forthcoming, Duke Law Journal

Harvard Public Law Working Paper No. 22-11

17 Pages Posted: 6 Apr 2022 Last revised: 14 Jun 2022

See all articles by Cass R. Sunstein

Cass R. Sunstein

Harvard Law School; Harvard University - Harvard Kennedy School (HKS)

Date Written: March 31, 2022

Abstract

Behaviorally informed interventions include nudges, taxes, subsidies, bans, and mandates. In evaluating such 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). Preference satisfaction matters to welfare, but preference satisfaction is not foundational: People might prefer Option A over Option B, but if Option B produces more welfare than Option A, we should not celebrate a situation in which everyone ends up with Option A. The arguments for investigating welfare effects, and effects on distributive justice, are meant as objections to efforts to evaluate behaviorally informed interventions solely in terms of (for example) ex ante revealed preferences and effects on participation rates. The arguments are also meant as pleas for analysis of the distributive effects of such interventions and for specification and investigation of their welfare effects, including their effects on experienced well-being. A pervasive concern is that behaviorally informed interventions might have negative welfare effects on subjective well-being that are easily ignored – as, for example, when information disclosure makes people sad or scared, or when a shift to healthier eating makes people enjoy their meals less. At the same time, such interventions might have positive effects on subjective well-being that are easily ignored – as, for example, when information disclosure makes people feel confident and safe, or when a shift to healthier eating makes people enjoy their meals more.

Keywords: behavioral economics, welfare, liberty, nudges, distributive justice, prioritarianism

JEL Classification: D9, D90, D91, I30, I31

Suggested Citation

Sunstein, Cass R., Welfare Now (March 31, 2022). Forthcoming, Duke Law Journal, Harvard Public Law Working Paper No. 22-11, Available at SSRN: https://ssrn.com/abstract=4071974 or http://dx.doi.org/10.2139/ssrn.4071974

Cass R. Sunstein (Contact Author)

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Harvard University - Harvard Kennedy School (HKS) ( email )

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