Beyond Outcomes: Measuring Procedural Utility

Posted: 29 Feb 2008

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Alois Stutzer

University of Basel - Faculty of Business and Economics; IZA Institute of Labor Economics

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Abstract

People not only obtain utility from actual outcomes but also from the conditions which lead to these outcomes. The paper proposes an economic concept of this notion of procedural utility. Preferences beyond outcome can be manifold. We distinguish procedural utility people get from institutions as such, i.e., from how allocative and redistributive decisions are taken, procedural utility from activities towards which people have an intrinsic attitude and procedural utility from the way being treated in interaction with other people. In an empirical application, it is studied whether people gain procedural utility from participating in the political decision-making process itself, irrespective of the outcome. Utility is measured by individuals' reported subjective well-being. We find that participation rights provide procedural utility in terms of a feeling of self-determination and influence. In contrast, actual participation and use of participation rights does not.

Suggested Citation

Frey, Bruno S. and Stutzer, Alois, Beyond Outcomes: Measuring Procedural Utility. Oxford Economic Papers, Vol. 57, No. 1, pp. 90-111, 2005. Available at SSRN: https://ssrn.com/abstract=916816

Bruno S. Frey (Contact Author)

CREMA ( email )

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University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002
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Alois Stutzer

University of Basel - Faculty of Business and Economics ( email )

Peter Merian-Weg 6
4002 Basel
Switzerland
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0041 61 267 3340 (Fax)

HOME PAGE: http://www.wwz.unibas.ch/stutzer/

IZA Institute of Labor Economics

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Germany

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