Skip to main content
×
Home
    • Aa
    • Aa

The Behavioral Welfare Paradox: Practical, Ethical and Welfare Implications of Nudging

Abstract

With decades of behavioral economic research now achieving prominence, the last decade has seen the advent of behavioral policymaking. These efforts have been widely seen as successful in that they achieve policy goals without inducing backlash on the part of policy targets. Behavioral policies create a unique challenge to welfare analysis that has not been sufficiently addressed in the literature. The existence of behavioral effects creates a paradox, at once justifying the use of paternalistic policies and undermining the empirical foundations of welfare analysis. In this paper I explore the behavioral welfare paradox and its implications for economic policy prescription.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      The Behavioral Welfare Paradox: Practical, Ethical and Welfare Implications of Nudging
      Available formats
      ×
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about sending content to Dropbox.

      The Behavioral Welfare Paradox: Practical, Ethical and Welfare Implications of Nudging
      Available formats
      ×
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about sending content to Google Drive.

      The Behavioral Welfare Paradox: Practical, Ethical and Welfare Implications of Nudging
      Available formats
      ×
Copyright
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Corresponding author
Correspondence: David R. Just ■ 210C Warren HallCornell UniversityIthaca, NY 14853 ■ Phone 607.255.2086 ■ Email: djust@cornell.edu.
Footnotes
Hide All

This article was originally prepared for the 2016 “Outstanding Public Service through Economics” award lecture held at the annual meeting of the Northeastern Agricultural and Resource Economics Association in Bar Harbor, Maine.

The views expressed are the author's and do not necessarily represent the policies or views of any sponsoring agencies.

Footnotes
Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

J. Bhattacharya , and N. Sood . 2007. “Health Insurance and the Obesity Externality.” Advances in Health Economics and Health Services Research 17(1) : 279318.

B.D. Bernheim , and A. Rangel . 2007. “Toward Choice-theoretic Foundations for Behavioral Welfare Economics.” American Economic Review 97(2): 464470.

J. Cawley and C. Meyerhoefer . 2012. “The Medical Care Costs of Obesity: an Instrumental Variables Approach.” Journal of Health Economics 31(1): 219230.

S.F. S. Chen , K.B. Monroe and Y.C. Lou . 1998. “The Effects of Framing Price Promotion Messages on Consumers' Perceptions and Purchase Intentions.” Journal of Retailing 74(3): 353372.

A. Cohen and L. Einav . 2003. “The Effects of Mandatory Seat Belt Laws on Driving Behavior and Traffic Fatalities.” Review of Economics and Statistics 85(4): 828843.

S. Della Vigna and U. Malmendier . 2006. “Paying Not to Go to the Gym.” American Economic Review 96(3): 694719.

A. Downs 1957. “An Economic Theory of Political Action in a Democracy.” Journal of Political Economy 65(2): 135150.

P.J. Ferraro and M.K. Price . 2013. “Using Nonpecuniary Strategies to Influence Behavior: Evidence from a Large-scale Field Experiment.” Review of Economics and Statistics 95(1):6473.

G. Gabrielyan , D.S. Hanks , K. Hoy , D.R. Just and B. Wansink . 2017. “Who's Adopting the Smarter Lunchroom Approach? Individual Characteristics of Innovative Food Service Directors.” Evaluation and Program Planning 60: 7280.

A.S. Hanks , D.R. Just , and B. Wansink . 2014. “Chocolate Milk Consequences: A Pilot Study Evaluating the Consequences of Banning Chocolate Milk in School Cafeterias.” PloS One 9(4): e91022.

P. G. Hansen 2012. “Should We Be ‘Nudging’ for Cadaveric Organ Donations?American Journal of Bioethics 12(2): 4648.

H. Hotelling 1938. “The General Welfare in Relation to Problems of Taxation and of Railway and Utility Rates.” Econometrica 6(3): 242269.

D.R. Just , and G. Gabrielyan . 2016. “Why Behavioral Economics Matters to Global Food Policy.” Global Food Security 11(1):2633.

D.R. Just and J. Price . 2013. “Default Options, Incentives and Food Choices: Evidence from Elementary-school Children.” Public Health Nutrition 16(12): 22812288.

D. R. Just and B. Wansink . 2011. “The Flat-rate Pricing Paradox: Conflicting Effects of ‘All-You-Can-Eat’ Buffet Pricing.” Review of Economics and Statistics 93(1):193200.

D.R. Just , and B. Wansink . 2014. “One Man's Tall is Another Man's Small: How the Framing of Portion Size Influences Food Choice.” Health Economics 23(7): 776791.

H.K. Koh , and K.G. Sebelius . 2010. “Promoting Prevention through the Affordable Care Act.” New England Journal of Medicine 363(14): 12961299.

B. Kőszegi and M. Rabin . 2007. “Mistakes in Choice-based Welfare Analysis.” American Economic Review 97(2): 477481.

H. Lapan and G. Moschini . 2012. “Second-best Biofuel Policies and the Welfare Effects of Quantity Mandates and Subsidies.” Journal of Environmental Economics and Management 63 (2): 224241.

B. McCormick and I. Stone . 2007. “Economic Costs of Obesity and the Case for Government Intervention.” Obesity Reviews 8(s1): 161164.

C. Newman 2012. “The Food Costs of Healthier School Lunches.” Agricultural and Resource Economics Review 41(1): 1228.

J.W. Pennebaker and D.Y. Sanders . 1976. “American Graffiti: Effects of Authority and Reactance Arousal.” Personality and Social Psychology Bulletin 2(3): 264267.

G.C. Rausser 1982. “Political Economic Markets: PERTs and PESTs in Food and Agriculture.” American Journal of Agricultural Economics 64(5): 821833.

P. Romer 1994. “New Goods, Old Theory, and the Welfare Costs of Trade Restrictions.” Journal of Development Economics 43(1): 538.

R. Sturm and D.A. Cohen . 2009. “Zoning for Health? The Year-old Ban on New Fast-food Restaurants in South LA.” Health Affairs 28(6): w1088w1097.

C.R. Sunstein 2014. “Nudging: a Very Short GuideJournal of Consumer Policy 37(4): 583588.

R.H. Thaler , and C.R. Sunstein . 2003. “Libertarian Paternalism.” American Economic Review 93(2): 175179.

K.E. Warner 1983. “Bags, Buckles, and Belts: The Debate over Mandatory Passive Restraints in Automobiles.” Journal of Health Politics, Policy and Law 8(1): 4475.

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Agricultural and Resource Economics Review
  • ISSN: 1068-2805
  • EISSN: 2372-2614
  • URL: /core/journals/agricultural-and-resource-economics-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Full text views

Total number of HTML views: 15
Total number of PDF views: 167 *
Loading metrics...

Abstract views

Total abstract views: 172 *
Loading metrics...

* Views captured on Cambridge Core between 28th April 2017 - 19th August 2017. This data will be updated every 24 hours.