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The existence of self-control failures is often used to legitimize public policy interventions. The argument is that reducing self-control failures can make people better off, as judged by themselves. However, there is only scarce evidence on the frequency and welfare costs of self-control failures. This paper presents a survey method that allows us to measure self-control failures in everyday life and to identify their welfare costs in terms of associations with experienced subjective well-being. We present novel survey evidence using this method and discuss its implications for behavioural welfare economics and behavioural public policy. [ABSTRACT FROM AUTHOR]

Background: The COVID-19 pandemic has impacted the scope of health economics literature, which will increasingly examine value beyond health care interventions such as government policy and broad health system innovations. Aim: The study analyzes economic evaluations and methodologies evaluating government policies suppressing or mitigating transmission and reducing COVID-19, broad health system innovations, and models of care. This can facilitate future economic evaluations and assist government and public health policy decisions during pandemics. Methods: The Preferred Reporting Items for Systematic reviews and Meta-Analyses extension for Scoping Reviews (PRISMA-ScR) was used. Methodological quality was quantified using the scoring criteria in European Journal of Health Economics, Consolidated Health Economic Evaluation Reporting Standards (CHEERS) 2022 Checklist and the National Institute for Health and Care Excellence's (NICE) Cost Benefit Analysis Checklist. PUBMED, Medline, and Google Scholar were searched from 2020–2021. Results: Cost utility analysis (CUA) and cost benefit analysis (CBA) analyzing mortality, morbidity, quality adjusted life year (QALY) gained, national income loss, and value of production effectively evaluate government policies suppressing or mitigating COVID-19 transmission, disease, and impacting national income loss. The WHO's pandemic economic framework facilitates economic evaluations of social and movement restrictions. Social return on investment (SROI) links benefits to health and broader social improvements. Multi-criteria decision analysis (MCDA) can facilitate vaccine prioritization, equitable health access, and technology evaluation. Social welfare function (SWF) can account for social inequalities and population-wide policy impact. It is a generalization of CBA, and operationally, it is equal to an equity-weighted CBA. It can provide governments with a guideline for achieving the optimal distribution of income, which is vital during pandemics. Economic evaluations of broad health system innovations and care models addressing COVID-19 effectively use cost effectiveness analysis (CEA) that utilize decision trees and Monte Carlo models, and CUAs that effectively utilize decision trees and Markov models, respectively. Conclusion: These methodologies are very instructive for governments, in addition to their current use of CBA and the value of a statistical life analytical tool. CUA and CBA effectively evaluate government policies suppressing or mitigating COVID-19 transmission, disease, and impacts on national income loss. CEA and CUA effectively evaluate broad health system innovations and care models addressing COVID-19. The WHO's framework, SROI, MCDA, and SWF can also facilitate government decision-making during pandemics. [ABSTRACT FROM AUTHOR]

In this short paper, we build a simple model where a non-welfarist social welfare function can be transformed into and thus be identical to a welfarist social welfare function in form. Our analysis first suggests that non-welfarist methods of policy assessment can also obey the Pareto principle. More broadly, our analysis is a useful input in thinking rigorously about the formal underpinnings of standard welfare economics. [ABSTRACT FROM AUTHOR]

Urban-rural integration is an advanced form resulting from the future evolution of urban-rural relationships. Nevertheless, little research has explored whether urban and rural areas can move from dual segmentation to integrated development from a theoretical or empirical perspective. Based on the research framework of welfare economics, which offers an appealing paradigm to frame the underlying game between cities and villages, this study clarifies the ideal state of urban-rural integration. It then proposes a series of basic assumptions, and constructs a corresponding objective function and its constraints. Moreover, it assesses the possibility of seeing the transmutation from division to integration between urban and rural areas with continuous socio-economic development. The authors argue that the ideal state of urban-rural integration should be a Pareto-driven optimal allocation of urban-rural resources and outputs, and the maximization of social welfare in the entire region. Based on a systematic demonstration using mathematical models, the study proposes that urban and rural areas can enter this ideal integrated development pattern when certain parameter conditions are met. In general, this study demonstrates the theoretical logic and scientific foundations of urban-rural integration, enriches theoretical studies about urban-rural relationships, and provides basic theoretical support for large developing countries to build a coordinated and orderly urban-rural community with a shared future. [ABSTRACT FROM AUTHOR]

This research paper aims to present the results of the implementation of the C.W.-SMILE tool that recorded child well-being in the second semester of the 2020–2021 school year. This is the fifth round of this ongoing diachronic research. The C.W.-SMILE tool consists of six dimensions: home conditions (D.1), nutrition (D.2), unemployment of guardians (D.3), free healthcare (D.4), moral education (D.5), and leisure (D.6). The first three dimensions concern children's economic well-being, while the latter three dimensions determine children's non-economic well-being. Based on welfare economics, the combination of economic well-being and non-economic well-being constitutes children's general (social) well-being. Each dimension consists of Simple Indicators. The paper also presents the results of the school year as a whole, to help investigate the evolving impact of the COVID-19 pandemic on children's well-being for more periods. The tool was used to measure the well-being of children in Attica, through questionnaires that were circulated in 22 public schools and three support centers of the organization 'The Smile of the Child' (25 units in total). The sample consisted of 509 children, belonging to three distinct school categories. The results of the second semester are mapped in seven clusters (relating to seven socio-economically homogenous groups of municipalities in Attica). Analysis of the results of the school year 2020–2021 was done based on the data collected from a sample of 1,623 children; in other words, it took into account the data relating to the entire samples that were surveyed in the first and second semesters. The central outcomes of all the previous rounds of the research are verified through a principal component analysis (PCA), and a multiple correspondence analysis (MCA) which are employed for the fifth round. Finally, the paper suggests an action plan of social welfare based on a ChoiCo game designed for the needs of the fifth round of the C.W.-SMILE research. [ABSTRACT FROM AUTHOR]

Utilitarianism is the most prominent social welfare function in economics. We present three new axiomatic characterizations of utilitarian (that is, additively-separable) social welfare functions in a setting where there is risk over both population size and individuals' welfares. We first show that, given uncontroversial basic axioms, Blackorby et al.'s (J Popul Econ 11:1–20, 1998) Expected Critical-Level Generalized Utilitarianism is equivalent to a new axiom holding that it is better to allocate higher utility-conditional-on-existence to possible people who have a higher probability of existence. The other two characterizations extend and clarify classic axiomatizations of utilitarianism from settings with either social risk or variable-population, considered alone. [ABSTRACT FROM AUTHOR]

Menger's distinction between "true" and "imaginary" goods and his attempt to relate the account of goods back to human needs invites a discussion of whether his work constitutes a fruitful basis for modern welfare economics. In this paper, we show that Menger's system contains indeed a form of welfare economics, but only in a limited sense. For Menger, individuality and individual processes of needs-discovery are central to human welfare. Beyond this abstract point, Menger's welfare economics is institutional. The economist can study the framework that is conducive to economic prosperity and the growth of knowledge, which are in turn conducive to agent-relative needs-discovery and satisfaction. To develop our argument, we examine the epistemic and ontological status of Menger's "exact laws" and their connection with his emphasis on true needs, true goods, and economic action. Overall, Menger's system gives economists good reasons why they might want to show humility and shy away from paternalistic policies that reduce the "countervailing" or "distorting" factors on economic behavior. [ABSTRACT FROM AUTHOR]

Perhaps the most important element of James Buchanan's contribution to constitutional economics is his differentiation between pre- and post-constitutional levels of decision-making. At first glance, a tension may appear between those two levels of analysis. In one, the rules by which we live are up for debate, allowing us to exercise our creative and imaginative capabilities in constitutional construction. In the other, the rules are viewed as fixed, and we are left simply to treat them as constraints. This paper explores three key elements of Buchanan's thought that allow him to navigate successfully between the two levels. The first is the importance of "the relatively absolute absolute", a concept learned from his mentor, Frank Knight. The second is Buchanan's approach to "truth judgments" in politics, and their status in our political discussions. Third, we draw on Buchanan's insights in his 1959 paper "Positive Economics, Welfare Economics, and Political Economy" to show how political economists should participate in this decision-making process—not as expert philosopher-kings, but as co-equals with their fellow citizens. Finally, we illustrate Buchanan's system of thought in action by presenting two case studies: Virginia education policy in the wake of Brown v. Board of Education, and the 1928 Supreme Court ruling in Miller v. Schoene. [ABSTRACT FROM AUTHOR]

We propose the use of Bayesian estimation of risk preferences of individuals for applications of behavioral welfare economics to evaluate observed choices that involve risk. Bayesian estimation provides more systematic control of the use of informative priors over inferences about risk preferences for each individual in a sample. We demonstrate that these methods make a difference to the rigorous normative evaluation of decisions in a case study of insurance purchases. We also show that hierarchical Bayesian methods can be used to infer welfare reliably and efficiently even with significantly reduced demands on the number of choices that each subject has to make. Finally, we illustrate the natural use of Bayesian methods in the adaptive evaluation of welfare. [ABSTRACT FROM AUTHOR]

Welfare economics analyzes societal well-being based on individual levels of self-evaluated happiness or "utility." All human emotions, including what economists label as utility, are evolutionary creations, shaped by natural selection for the sole purpose of altering individuals' behavior in ways that maximize their relative reproductive success. Because of the evolutionary origins and nature of human motivations, welfare economics has little to say about societal well-being. While welfare economics is not useful for normative statements, it nonetheless provides a measure of the difficulties in implementing policy. [ABSTRACT FROM AUTHOR]

In this paper, I defend a version of the medical model of disability, which defines disability as an enduring biological dysfunction that causes its bearer a significant degree of impairment. We should accept the medical model, I argue, because it succeeds in capturing our judgments about what conditions do and do not qualify as disabilities, because it offers a compelling explanation for what makes a condition count as a disability, and because it justifies why the federal government should spend hundreds of billions of dollars, annually, on aid and accommodations for disabled people. After responding to a pair of objections Elizabeth Barnes has raised against the medical model, I contrast it with Guy Kahane and Julian Savulescu's welfarist account of disability, and with Barnes's own mere-difference view. Both of these accounts face serious challenges, although elements of Barnes's view can—and, in my opinion, should—be adopted by proponents of the medical model. [ABSTRACT FROM AUTHOR]

This paper aims to present the results of implementing a new, multi-dimensional and cumulative tool that records the well-being of children in the 1st semester of the school year 2020–2021, which constitutes the fourth round of an ongoing research. The tool was implemented in Attica through questionnaires circulated in twenty-five schools and three support centers for children and families under the organization, "The Smile of the Child" (twenty-eight bodies in total). The total number of children who participated in the sample was 1,114, belonging to three distinct school categories: the 6th grade of elementary school (10–11 years old), the 3rd grade of junior high (13–14 years old), and the 3rd grade of high school (16–17 years old). The results, mapped out in seven clusters, reveal evident concerns over nutrition and the moral education of students. In addition, the results indicate the impact of the COVID-19 pandemic on the well-being of children and reveal with regard to national policy and legislation framework that the status of welfare state in Greece is ineffective and problematic. The theoretical and methodological framework of the study was confirmed through a multiple correspondence analysis (MCA) and a principal component analysis (PCA).The outputs of MCA reflect and confirm the good effect of "The Smile of the Child" for children in need. Finally, an action plan including the creation of policies based on public finance and fuzzy logic was suggested, the most important being the necessity of the establishment of a new Ministry for the protection of child well-being. [ABSTRACT FROM AUTHOR]

We present higher order necessary conditions for a model of welfare economics, where the preference mapping has a star-shape property. We assume that the preferences can be satiable and can be described by an arbitrary preference set, without the use of utility functions. These conditions are formulated in terms of higher-order directional derivatives of multivalued mappings, and the variable domination structure is not given by cones. [ABSTRACT FROM AUTHOR]

This research paper aims to present the results of implementing a new multi-dimensional and cumulative tool that records child well-being, in the 2nd semester of the school year 2019–2020, which is the third round of an ongoing research. It also presents the results of the same year as a whole, in order to investigate the impact of the COVID-19 pandemic on the well-being of children. The tool was applied in Attica through questionnaires, addressing 22 public schools and three support centers of the organization, The Smile of the Child (25 units in total). The number of children in the sample was 560, belonging to three distinct school categories. The results of the 2nd semester were mapped out in seven clusters. The analysis of the results of the school year 2019–2020 as a whole was applied on a sample of 1,731 children; in other words, it incorporated almost the entire sample of the surveys conducted in the 1st and 2nd semesters. Finally, an action plan, based on the legal framework, focusing on mitigating the negative effects of the pandemic on child well-being is suggested. [ABSTRACT FROM AUTHOR]

This paper proposes a theoretical model in which a formal upstream firm competes against informal input suppliers, which constitute an alternative, albeit lower-quality input source for formal downstream firms. The existence of an alternative source increases competition in the industry, which tends to be welfare-increasing. However, it may also distort the incentives of the formal upstream firm to invest in quality upgrading. Assuming quantity competition downstream, we analyze how these incentives change and whether the negative welfare effect of a reduced investment by the upstream firm may more than offset the positive welfare effect of increased competition brought about by informal input suppliers. We find that there are parameter values such that this is the case, and welfare decreases if informal input suppliers are present. We analyze the robustness of this result to alternative modeling assumptions, such as price competition downstream and the use of two-part tariffs by the formal upstream firm. [ABSTRACT FROM AUTHOR]

In many countries, commercial and recreational fishing compete for access to marine resources. In some cases, recreational catch outweighs commercial harvest and may threaten species otherwise protected from commercial fishing. This has led to increasing calls for improved management of recreational fishing in the broader context of general fisheries management. As a result, fisheries managers face the challenge to decide how to allocate the available marine resources between competing uses. In this paper, we review and explain two common approaches that have been used to support recreational fishing allocation decisions. While economic activity analysis is an appropriate tool to assess how a change in resource allocation would affect regional economic activity (economic contributions and impacts), it is ill-suited to assess associated gains or losses in welfare of society as a whole (economic efficiency). Hence, economic activity analysis and social cost–benefit analysis complement each other, with each providing a different set of information answering a different set of questions. Unfortunately, both types of analysis use the term "economic value" suggesting that they are alternative approaches that provide the same information, whereas in fact they are not. If the objective of fishery managers is to ensure that society as a whole is made better off, the appropriate metric is economic value as defined by welfare economics. Under this definition, all goods and services provided by marine resources that are beneficial to humans have economic value. This includes non-use values such as the continued existence of an endangered marine species. The aim of this paper is to support managers and policymakers in allocating marine resources by reviewing relevant economic principles, concepts, and tools in the context of recreational fishing, including the use and challenges of estimating the non-market benefits generated by recreational fishing experiences. [ABSTRACT FROM AUTHOR]

I reconsider Bleichrodt, Pinto Prades and Wakker's (BPW) 2001 paper about eliciting utility measures from stated preference surveys. That paper pioneers a method that is now widely used in behavioural economics to correct individuals' 'biases' and to recover their 'true preferences'. However, BPW propose this method as way of dealing with inconsistent responses to stated preference surveys, in contrast to more recent applications which aim to help individuals to avoid supposed mistakes in their private choices. I argue that the concepts of true preference and bias are empirically ungrounded, but that BPW's approach can be interpreted as not invoking those concepts. By 'regularising' preferences revealed in actual choice, this approach constructs measures of individual welfare that are broadly aligned with actual preferences and consistent with normative standards of rationality that are appropriate for public decision-making. Public decision-makers' normative judgements are made explicit, rather than being disguised as apparently empirical claims about true preferences. [ABSTRACT FROM AUTHOR]

Traditionally, economists and tax theorists justify taxation by means of externalities. In recent years, both scholars and policymakers have begun advocating 'sin taxes' on goods whose consumption causes 'internalities': unaccounted-for costs that a person imposes on herself, not on others. In this paper, we argue that sin taxes rest on a static model of individual choice. They retain neoclassical rationality—with its endorsement of stable and context-independent preferences—as a normative benchmark for good, i.e., welfare-increasing choice. We contrast this model with a more dynamic understanding of choice in which preferences are context-dependent, evolving, and open to individual processes of experimentation. Such a dynamic understanding of choice is backed by recent findings in psychology and behavioral economics and is integral to the political economy of John Stuart Mill. Contributing to the most recent literature in behavioral welfare economics, we argue that the reality of dynamic and evolving preferences animates a contractarian perspective on public policy which, in turn, provides strong arguments against the sin-tax agenda and supports preference-neutral tax rules. [ABSTRACT FROM AUTHOR]

This is a comparative study of children's resource shares in male-headed and female-headed households. To this end we estimate a household collective model using a rotating panel of households from the Jamaican Survey of Living Conditions over a period of 21 years (1990–2010). We find that the gender of the household head is important in determining individual resource shares within the household. Our results also indicate that children receive substantially larger resource shares in female-headed households than in male-headed ones and hence children who live in relatively poor female-headed households are not necessarily worse off. Additionally, the effects of household characteristics on the shares of children are shown to vary considerably based on the gender of the household head. [ABSTRACT FROM AUTHOR]

We investigate competitive equilibria in a special type of incomplete markets, referred to as a comonotone market, where agents can only trade such that their risk allocation is comonotonic. The comonotone market is motivated by the no-sabotage condition. For instance, in a standard insurance market, the allocation of risk among the insured, the insurer and the reinsurers is assumed to be comonotonic a priori to the risk-exchange. Two popular classes of preferences in risk management and behavioral economics, dual utilities (DU) and rank-dependent expected utilities (RDU), are used to formulate agents' objectives. We present various results on properties and characterization of competitive equilibria in this framework, and in particular their relation to complete markets. For DU-comonotone markets, we find the equilibrium in closed form and for RDU-comonotone markets, we find the equilibrium in closed form in special cases. The fundamental theorems of welfare economics are established in both the DU and RDU markets. We further propose an algorithm to numerically obtain competitive equilibria based on discretization, which works for both the DU-comonotone market and the RDU-comonotone market. Although the comonotone and complete markets are closely related, many of our findings are intriguing and in sharp contrast to results in the literature on complete markets in terms of existence, uniqueness, and closed-form solutions of the equilibria, and comonotonicity of the pricing kernel. [ABSTRACT FROM AUTHOR]

The year 2020 marks the centennial of the publication of Arthur Cecil Pigou's magnum opus The Economics of Welfare. Pigou's pricing principles have had an enduring influence on the academic debate, with a widespread consensus having emerged among economists that Pigouvian taxes or subsidies are theoretically desirable, but politically infeasible. In this article, we revisit Pigou's contribution and argue that this consensus is somewhat spurious, particularly in two ways: (1) Economists are too quick to ignore the theoretical problems and subtleties that Pigouvian pricing still faces; (2) The wholesale skepticism concerning the political viability of Pigouvian pricing is at odds with its recent practical achievements. These two points are made by, first, outlining the theoretical and political challenges that include uncertainty about the social cost of carbon, the unclear relationship between the cost–benefit and cost-effectiveness approaches, distributional concerns, fragmented ministerial responsibilities, an unstable tax base, commitment problems, lack of acceptance and trust between government and citizens as well as incomplete international cooperation. Secondly, we discuss the recent political success of Pigouvian pricing, as evidenced by the German government's 2019 climate policy reform and the EU's Green Deal. We conclude by presenting a research agenda for addressing the remaining barriers that need to be overcome to make Pigouvian pricing a common political practice. [ABSTRACT FROM AUTHOR]

This paper reviews recent findings on the normative analysis of private and governmental countermeasures against infectious diseases, focusing on COVID-19. Based on a model that relates the economic activity to infectious disease epidemics, policies that maximize social welfare are considered. Lockdowns in many countries are measures that restrict economic activity over a wide area, and the economic damage they cause is extremely large. Existing studies on the net benefit of lockdown implemented in 2020 have reached mixed conclusions as to whether it is warranted or not. Although the estimates of costs and effects are relatively stable, the setting of the value of a statistical life for converting effects into benefits has a wide range and is also likely to overestimate benefits. Therefore, a careful procedure for setting is particularly crucial to obtain a reliable evaluation of countermeasures. Compared to uniform restriction of activities, taking measures to restrict activities by selecting targets may improve efficiency. Attributes that can be used to select targets include those that can be identified at little or no cost, such as age and industry, and those that can only be identified at a cost, such as close contact with infectious individuals and the presence of pathogens. In comparison to lockdown, these measures may reduce human suffering and economic suffering. No trade-off exists between uniform activity restrictions and selective activity restrictions. [ABSTRACT FROM AUTHOR]

If Rawls's A Theory of Justice has achieved fame among economists, this is due to his Difference Principle, which says that inequalities of resources should be to the benefit of the less fortunate, or more operationally, that allocations of resources should be ranked by the maximin criterion. We extend the Rawlsian maximin in two ways: first, by resorting to the more general min-of-means formula of decision theory, second, by addressing the case where the resources accruing to each individual are uncertain to society. For the latter purpose, we resort to the ex ante versus ex post distinction of welfare economics. The paper axiomatically characterizes the ex ante and ex post forms of the Rawlsian maximin and compares them in terms of egalitarian criteria. It finally recommends and axiomatizes a compromise egalitarian theory that mixes the two forms. [ABSTRACT FROM AUTHOR]

A correction to the article "Welcoming and Generative Local Welfare as an Agent for Territorial Development: A Case Study from Southern Italy" that was published in a previous issue of the periodical, is presented.

The ongoing controversy about sweatshop labor has mainly focused on economic, on the one, and ethical aspects, on the other side. While proponents of sweatshop labor have argued that low wages would attract foreign investments, would create new workplace opportunities and thus improve economic welfare in less-developed countries, opponents of sweatshop labor argue that such treatment of laborers would violate their dignity, and they prompt western buyers to stop this kind of exploitation. However, the arguments in this debate are not new. As we will show, they can be traced back to the early "sweatshop" debate between social reformers and classical liberals in the 19th century. Interestingly, the 19th century debate identified sweatshop labor not as an industrial system but as a social phenomenon which becomes more likely when several social preconditions are fulfilled. It will be shown that the social preconditions identified in this debate determine working conditions till today and can be used to identify industries were sweatshop labor is more likely than in others—even in western countries. [ABSTRACT FROM AUTHOR]

While antispeciesism is an ethical notion, veganism is behavioral. In this paper, we examine the links between the two. Building on Blackorby and Donaldson (Econ J 102:1345–1369, 1992), we consider a two-species model in which humans consume animals. The level of antispeciesism is conceived as the weight on animals' welfare in the utilitarian social welfare function. We show that more antispeciesism increases meat consumption if and only if animals' utility is positive. That is, the critical condition is whether farm animals' lives are worth living. We then empirically explore this condition using a survey. We find that farm-animal experts and frequent meat eaters are more likely to believe that the lives of farm animals are worth living. We finally discuss some issues in the study of animal welfare in economics and social choice. [ABSTRACT FROM AUTHOR]

This article examines the political crisis of social-democratic parties in Western Europe in light of its impact on the social-democratic emancipatory project, and asks whether the first calls the second into question. It begins by defining social democracy as an emancipatory project, and identifies three major historical phases that correspond to three distinct conceptions of the project. "Social-democratic dilemmas" section examines recent literature in comparative welfare state economics, political sociology, and studies of populism and authoritarianism, to show how the socio-economic transformations of the last five decades have enlarged and fragmented the constituency of social-democratic parties, and contends that this situation has generated powerful tensions between the normative and the mundane dimensions of the social-democratic project. Three major dilemmas—economic, cultural, and political—leading to three deep conflicts internal to the social-democratic constituency are identified and discussed. Combining these empirical findings with the three rival interpretations of the social-democratic project introduced in "Social democracy as an ideational and a mundane project" section, "Three scenarios" section develops three possible scenarios for the evolution of this project in the near future: decline, drift, and renewal. "Implications for policy and politics" section assesses the likelihood and political meaning of each scenario for the pursuit of the social-democratic project, taking into consideration the recent upsurge of left-wing populism. [ABSTRACT FROM AUTHOR]

This paper aims to establish new, multi-dimensional indicators of child well-being suitable to urban regions such as Attica, Greece, and adjusted to the new form of child poverty that has become apparent during its recent financial crisis. The paper mainly argues that child well-being is a multi-dimensional phenomenon and that the financial crisis produced a specific need for new scientific tools adapted to the particular features that emerged under this circumstance. Within this context, definitions of child well-being and child poverty were developed. With these definitions as foundation, a tool comprising many indicators was formulated to record child well-being; this was applied in Attica through questionnaires addressing 27 public schools and three support centers of the organization, The Smile of the Child, covering two periods: the school years between 2010 and 2018 collectively and the school year 2018–2019 individually. The total number of children in the sample was 878, belonging to three distinct school categories. The results were mapped out in seven clusters. The theoretical and methodological framework of the study was confirmed through a Principal Component Analysis (PCA). The results reveal that child well-being improved in the period 2018–2019 while there were evident concerns regarding unemployment and whether the education individuals receive is relevant to what kind of people they ought to be. Finally, an action plan focusing on these dimensions and some of the clusters along with an auxiliary tool for decision-making founded on fuzzy logic have been suggested. [ABSTRACT FROM AUTHOR]

The capability approach (CA) is a theoretical framework that emphasizes the moral significance of individuals' capability to achieve outcomes that they value and have reason to value. It focuses on the actual opportunities that people have given their personal and social circumstances. This approach is grounded in the attempt to address fundamental deficiencies of the utilitarian approaches to welfare economics and to raise equity issues. In this work, we explore CA in the context of the transportation field. We develop a new measure, "Value of Capability gains" (VOC), designed to account for both efficiency and equity considerations as the key benefits taken into account in a Cost Benefit Analysis. We utilize activity-based models to assess travelers' capabilities under different transportation improvement scenarios. By using the activity-based accessibility measure to reflect individuals' abilities to reach alternatives that are potentially achievable, in accordance with the CA approach, the principle of diminishing marginal utility can be activated and applied to accessibility as a quantity of good or service—so that the more alternatives available to the traveler, the smaller the marginal benefit from an additional alternative. We use the VOC measure to examine different transportation scenarios in a simple synthetic case study, demonstrating that this new measure better accounts for equity. [ABSTRACT FROM AUTHOR]

Despite the importance of pioneering work by such precursors as Jean-Charles de Borda and Marquis de Condorcet in the 18th century, it was Kenneth Arrow and his general impossibility theorem that elevated the scientific status of social choice theory into an unprecedented plateau. This paper tries to highlight several unique features of his research program of social choice theory vis-à-vis the classical contributions of Borda and Condorcet, on the one hand, and the "new" welfare economics à la Bergson and Samuelson, on the other hand, as well as to identify several channels through which his impossibility impasse could be circumvented. It is concluded with several personal reminiscences of Kenneth Arrow based on the author's own experiences with him over four decades. [ABSTRACT FROM AUTHOR]

This article empirically compares four electricity-pricing programs—increasing-block pricing (IBP); floating increasing-block pricing (FIBP); free market pricing (FMP); and a price-cum-trade incentive system (PTS)—in terms of efficiency, cost recovery, and income distribution by using the residential electricity data of Taiwan. The research results show that IBP and FIBP suffer from the same problem: It is hard to be cost-neutral. Further, FMP is economically efficient while favoring the electric utility over the households. PTS—which is a pricing program that satisfies the second fundamental theorem of welfare economics—shows a better ability to consider economic efficiency and equity simultaneously. [ABSTRACT FROM AUTHOR]

Gordon Tullock developed an approach to understanding dynamic processes of political change and policy outcomes. The key insight is the notion that political insiders have a comparative advantage—because they face lower transaction costs—in manipulating rules. The result is that political actors can collect revenues from threatening to restrict, or offering to loosen, access to valuable permissions, permits, or services. To the extent that the ability to pay for such favorable treatment is a consequence of private activities that produce greater social value, there is a "political Coase theorem": corruption makes bad systems more efficient. But the dynamic consequences are extremely negative, because of the inability to institute reforms resulting from application of Tullock's "transitional gains trap." [ABSTRACT FROM AUTHOR]

Empirical demonstrations that people's behavior often deviates from predictions of models based on the assumption of coherent preferences highlight the possibility that people's choices systematically misrepresent what they genuinely want. Thus, the concept of welfare as preference satisfaction becomes more questionable than ever. The essay addresses the alternative to neoclassical welfare economics proposed by the libertarian paternalists. It shows the centrality of the idea of 'true preferences' for the libertarian paternalist program. However, the existing proposals on how to uncover true preferences are found lacking. This effectively undercuts the idea that the government could intervene in a transparent, non-arbitrary fashion to correct 'behavioral market failures.' The essay concludes with a plea to the benevolent policy-makers to retain a humble, skeptical attitude towards the use of tools of psychological manipulation which is legitimized by vague welfare criteria. [ABSTRACT FROM AUTHOR]

The emergence of large technology platforms has raised fundamental questions about antitrust enforcement. These questions, which are the subject of this RIO special issue, are now challenging scholars and policy makers. The topics covered here include the role of economics and the consumer welfare standard in antitrust; lessons from historic antitrust cases; the role of big data in antitrust analysis; antitrust analysis of multi-sided markets; and the interplay between competition and privacy regulation. [ABSTRACT FROM AUTHOR]

By using empirical methodology, this paper investigates to what extent the public interest and the private interest theories, respectively, explain the actual regulatory process. Our estimation findings are as follows: First, on average (whole industry basis), the explanation power of the public interest theory is about 46- 78%, while that of the private interest theory is about 22-54%. Second, the explanatory power of the public interest theory is higher in non-public utility industries, while that of the private interest theory is higher in public utility industries. This suggests that regulations on non-public utility industry are constructed largely with social welfare in mind, as assumed in conventional neoclassical welfare economics, but that those in the public utility industry tend to be captured largely by private groups, as assumed in private interest theory. [ABSTRACT FROM AUTHOR]

Some philosophers argue that if market reasoning exceeds certain limits, it may 'corrupt' certain cherished values; and the tendency of modern economics to encourage such 'corruption' has its roots in its normative foundations. Michael Sandel goes further and suggests that this tendency can be traced to utilitarian reasoning. I argue that the desire to restrict the scope of economics can be found in the utilitarian origins of neoclassical economics. The argument that market reasoning may 'corrupt' various values has gained credence from the work of market enthusiasts like Gary Becker but does not apply to the traditional framework of welfare economics. Furthermore, if economists adopt the informed desire or preference view of welfare endorsed by some utilitarians, certain arguments advanced by these philosophers can be rebutted. [ABSTRACT FROM AUTHOR]

This paper documents global progress in human well-being since the end of World War II and, more specifically, since 1950. The paper focuses on the transformative changes in quality of life that have occurred over this period in four of the most critical sectors of well-being: the health, education, economic, and welfare sectors. We also consider the significant impact that changes in the natural environment have and continue to make on humanity. In all five sectors we also identify what we regard as the underlying "drivers" that have made these transformative changes in the human condition possible and suggest how the strength of these changes can be expected to contribute to the further enhancement of quality of life and well-being over at least the near term. In pursuing these objectives, we argued in favor of adopting a more positive view with respect to the advances in quality of life and well-being that have taken place since 1950. [ABSTRACT FROM AUTHOR]

There has been considerable debate on the extent to which future costs should be included in cost-effectiveness analyses of health technologies. In this article, we summarize the theoretical debates and empirical research in this area and highlight the conclusions that can be drawn for current practice. For future related and future unrelated medical costs, the literature suggests that inclusion is required to obtain optimal outcomes from available resources. This conclusion does not depend on the perspective adopted by the decision maker. Future non-medical costs are only relevant when adopting a societal perspective; these should be included if the benefits of non-medical consumption and production are also included in the evaluation. Whether this is the case currently remains unclear, given that benefits are typically quantified in quality-adjusted life-years and only limited research has been performed on the extent to which these (implicitly) capture benefits beyond health. Empirical research has shown that the impact of including future costs can be large, and that estimation of such costs is feasible. In practice, however, future unrelated medical costs and future unrelated non-medical consumption costs are typically excluded from economic evaluations. This is explicitly prescribed in some pharmacoeconomic guidelines. Further research is warranted on the development and improvement of methods for the estimation of future costs. Standardization of methods is needed to enhance the practical applicability of inclusion for the analyst and the comparability of the outcomes of different studies. For future non-medical costs, further research is also needed on the extent to which benefits related to this spending are captured in the measurement and valuation of health benefits, and how to broaden the scope of the evaluation if they are not sufficiently captured. [ABSTRACT FROM AUTHOR]

We consider an overlapping generations model with a durable local public good (DLPG). We establish a Tiebout theorem (equilibrium exists and is first best) as well as an equal treatment Second Welfare Theorem in this dynamic DLPG economy. We establish conditions, including the Small Jurisdiction assumption, under which local provision of durable public goods results in the full internalization of the intergenerational spillovers that durability entails. In contrast, when durable public goods are provided by the national government, internalization does not take place and underprovision of public goods results. This sets up an institutional trade-off between national and local provision of public goods that balances the relative strength of intergenerational and interjurisdictional spillovers. Our main conclusion is that while capitalization is an effective mechanism to cause agents to internalize intergenerational spillovers, the effectiveness of this mechanism is limited by the degree to which there are more general spillovers across jurisdictions. [ABSTRACT FROM AUTHOR]

In an unequal and fragile economy such as Nigeria, providing for the extreme poor, marginalized, disadvantaged, less privileged and vulnerable is still seen by elites as providing for the unproductive segment. This notion seems to be one of the reasons why the elites in government have not done much to scale down poverty and inequality. The study estimates the poverty impact of variations in within-group and between-group inequality using two sequential household survey data, the harmonized national living standard survey, 2010 and the national living standard survey, 2004. Specifically, the study explains the spatial and sectoral variations in estimates of the marginal poverty impact and elasticity with respect to within-group and between-group inequality. The main findings are; first, that within-group inequality and between-group inequality estimates are sensitive to the choice of Foster-Greer-Thorbecke (FGT) poverty measure, and might as well be sensitive to the choice of poverty line; second, that non-homogeneity is due to variations in the initial sub-group distributions; finally, that altering within-group inequality will have more important impact on poverty reduction than altering between-group inequality. [ABSTRACT FROM AUTHOR]

We compare welfare and profits under price and quantity competition in Stackelberg mixed duopolies. Under public leadership, price competition always yields greater profits and welfare than quantity competition. By contrast, under private leadership, the result depends on the nationality of the private firm. When the private firm is domestic (foreign), welfare is greater under quantity (price) competition. However, private firms always earn more under price competition. Introducing the nonnegative profit constraint affects welfare ranking but not profit ranking. These results indicate that profit ranking is fairly robust to the time structure in Stackelberg mixed duopolies, but welfare ranking is not. [ABSTRACT FROM AUTHOR]

What is the effect of out-migration on drinking water provision in rural China? Despite concerns about the ability of migrants to contribute to collective action for public goods provision, this study demonstrates that villages with higher rates of labor migration are more likely to have public drinking water than those with little migration. Temporary labor migration reduces isolation and increases connections outside the village. External funding sources including county governments favor villages where they have contacts as well as villages that need more support because most working-age adults are working outside the village. As a result, villages with high rates of out-migration are more likely have public access to drinking water. The findings are based on data from a survey of more than 50 natural villages in two townships of Southwest China. [ABSTRACT FROM AUTHOR]

Discrete choice welfare analysis is essential in non-market valuation to accompany studies using choice experiments and recreation choice models. McFadden (in: Melvin, Moore, Riezman (eds) Trade, theory and econometrics: essays in honor of John S. Chipman, Routledge, London, 1999) shows that discrete choice welfare measures derived by the common representative consumer approach can be biased under nonlinear income effects, and the percentage bias increases monotonically with the size of quality improvement. We present contrary results that percentage measurement errors in such welfare measures can go either direction and provide conditions under which the direction of bias can be identified. We also show that price and non-price variables play different roles in discrete choice welfare analysis. [ABSTRACT FROM AUTHOR]

This study constructs a variety expansion growth model that integrates basic research to analyse its effects on household welfare. In our model, the research sector consists of applied and basic research components. The former creates blueprints and expands the variety of goods available for consumption, whereas the latter adds to the public‐knowledge stock. The analysis yields several results. First, the steady‐state welfare‐maximizing level of basic research is below the steady‐state growth‐maximizing level. Second, a consideration of the welfare effects during the transition path suggests that marginal changes in the level of basic research can increase household welfare even at its steady‐state welfare‐maximizing level. Third, by using data from Japan, we calibrate the model and find that an increase in basic research spending raises household welfare. [ABSTRACT FROM AUTHOR]

This paper analyzes the equilibrium and welfare properties of an economy characterized by uncertainty and payoff externalities using a general model that nests several applications. Agents receive a private signal and an endogenous public signal, which is a noisy aggregate of individual actions, and causes an information externality. Agents in equilibrium underweight private information for a larger payoff parameter region in relation to when public information is exogenous. In addition, the socially optimal endogenous degree of coordination is lower than the socially optimal exogenous degree of coordination. The welfare effect of increasing the precision of the noise in the public signal has the same sign with endogenous or exogenous public information, but its magnitude differs. The social value of private information may be overturned in relation to when public information is exogenous: from positive to negative if agents in equilibrium coordinate more than is implied by the socially optimal exogenous degree of coordination, and the opposite if they coordinate less. [ABSTRACT FROM AUTHOR]

We study the long-run spatial distribution of industry using a multi-region core-periphery model with quasi-linear log utility Pflüger (Reg Sci Urban Econ 34:565-573, 2004). We show that a distribution in which industry is evenly dispersed among some of the regions, while the other regions have no industry, cannot be stable. A spatial distribution where industry is evenly distributed among all regions except one can be stable, but only if that region is significantly more industrialized than the other regions. When trade costs decrease, the type of transition from dispersion to agglomeration depends on the fraction of workers that are mobile. If this fraction is low, the transition from dispersion to agglomeration is catastrophic once dispersion becomes unstable. If it is high, there is a discontinuous jump to partial agglomeration in one region and then a smooth transition until full agglomeration. Finally, we find that mobile workers benefit from more agglomerated spatial distributions, whereas immobile workers prefer more dispersed distributions. The economy as a whole shows a tendency towards overagglomeration for intermediate levels of trade costs. [ABSTRACT FROM AUTHOR]

We investigate the effects of inequality aversion on equilibrium labor supply, tax revenue, income inequality, and median voter outcomes in a society where agents have heterogeneous skill levels. These outcomes are compared to those which result from the behavior of selfish agents. A variant of Fehr-Schmidt preferences is employed that allows the externality from agents who are “ahead” to differ in magnitude from the externality from those who are “behind” in the income distribution. We find first, that inequality-averse preferences yield distributional outcomes that are analogous to tax-transfer schemes with selfish agents, and may either increase or decrease average consumption. Second, in a society of inequality-averse agents, a linear income tax can be welfare-enhancing. Third, inequality-averse preferences can lead to less redistribution at any given tax, with low-wage agents receiving smaller net subsidies and/or high-wage individuals paying less in net taxes. Finally, an inequality-averse median voter may prefer higher redistribution even if it means less utility from own consumption and leisure. [ABSTRACT FROM AUTHOR]

This is a revised version of Francesco Forte’s introductory lecture on welfare economics delivered in Charlottesville when he first arrived at the University of Virginia. It was then reproduced in the author’s mimeographed book “Introduction to welfare economics”, published by the Thomas Jefferson Center of the University of Virginia in 1961. In the “old welfare economics”, three fundamental approaches may be distinguished. Pareto’s “ophelimity” requires that someone is made better off and no one is made worse off. A similar problem is present both in Wicksell, by the rule of the unanimous consent of the electorate representative, and in the Italian School of Public Finance that requires an open competition aimed at assembling a majority that pursues a similar solution. Finally, Pigou’s paternalistic approach combines maximum national income with its optimal distribution. In the “new welfare economics”, the approach in terms of Pareto’s compensation principle does not generate a stable equilibrium; the social welfare function approach formalizes Pigou’s approach with the inclusion of paternalistic value judgements. The way out consists in combining Paretian ordinal choice with Wicksellian unanimity, with the Italian school’s suggestion of competition in collective choices, or with both. [ABSTRACT FROM AUTHOR]

The evaluation of climate policy has emerged as an important application of cost-benefit analysis (CBA). But the tool, as it had been most widely used previously, was not suited for this problem. Spatially, the effects of climate change transcend national boundaries and, temporally, they transcend generational time scales. CBA, in its standard form, relies on assumptions that are not fully appropriate in this context. In this essay, I discuss the shortcomings of CBA framed by its historical development and argue that its relatively recent application to climate change has contributed to growth in the literature re-evaluating its normative foundations. In relation to discounting, recent innovations emphasise aspects such as the aggregation of a multiplicity of time preferences and the distinction between inter- and intra-generational time preferences, which lead to discounting approaches that differ from the standard approach with the Ramsey equation. In relation to spatial equity, much of the recent literature argues for the use of equity weights to account for impacts on different income groups. These are significant changes relative to the orthodoxy in the field before the emergence of climate change. [ABSTRACT FROM AUTHOR]