ACCOUNTING FOR SOCIAL COSTS ASSOCIATED WITH RESALE PRICE MAINTENANCE

Resale price maintenance (RPM) can provide a positive or negative effect on social welfare. The evaluation depends on many factors, such as whether a high-demand or low-demand state exists, storage/holding costs, and disposal costs. A number of articles addressing the welfare effects of RPM conclude they enhance social welfare. Disposal costs for manufactured products are real and increasingly accounted for in firm costs, and are an essential issue in environmental economics. This article examines the case for RPM with disposal costs. When not incorporated into firm profits, RPM may be welfare reducing. (JEL D42 , D62 , D81 )     

ENERGY UTILITIES, CONSERVATION, AND ECONOMIC EFFICIENCY

Academic and policy debate has centered around an apparent "underinvestment in conservation." This paper outlines traditional explanations for underinvestment and presents a prospect theory analysis of individual conservation behavior. On the basis of investment criteria, individuals seem to discriminate against conservation investments. While these decisions might appear rational as life style decisions, individual choice across different household appliances shows little consistency. For policymaking purposes, understanding and modeling actual behavior is crucial to maximizing social welfare. The insight of certain positive models of human behavior supports economic efficiency arguments for marketplace intervention. This paper argues that because individuals making conservation investment decisions apparently do not act according to the dictates of utilitarian economics, utility sponsored conservation programs are justified on economic efficiency grounds. Finally, in light of prospect theory considerations, the paper suggests marketing guidelines for conservation investments sponsored by electric utilities.     

社会价值、市场效率与收入分配

本文介绍我们所研究的总量消费者剩余方法。我们将老子的"为而不争"对应为市场经济的优化原理,定义为老子第二原则。老子第二原则在个人水平上的实现使市场有效率并达到个人水平上的帕累托最优。而老子第一原则"天之道利而无害"对应于帕累托改进,代表着社会进步的方向。由于自由市场不能自动实现最优收入分配,遵循"老子第一原则"的最大可能的社会进步的实现超越于自由市场力量之外。     

Salience and social choice

The axioms of expected utility and discounted utility theory have been tested extensively. In contrast, the axioms of social welfare functions have only been tested in a few questionnaire studies involving choices between hypothetical income distributions. In a controlled experiment with 100 subjects placed in the role of social planners, we test five fundamental properties of social welfare functions to determine the efficacy of traditional social choice models in predicting social planner allocations when presented with choice sets designed to test the axioms of the theory. We find that three properties of the standard social welfare functions tested are systematically violated, producing an Allais paradox, a common ratio effect, and a framing effect in social choice. We find support for scale invariance and a preference for tail-increasing transfers. Our experiment also enables us to test a model of salience-based social choice which predicts the systematic deviations and highlights the close relationship between these anomalies and the classical paradoxes for risk and time.

     

农民工非永久迁移对社会福利的动态影响分析

本文运用福利经济学的分析工具,阐述了农村劳动力非永久乡城迁移是在既定的约束条件下的一种理性选择.通过分析非永久乡城迁移对农村居民、城市居民和企业、社会福利的影响,最终得出农民工非永久迁移有利于农村和城市的发展,有利于社会福利的结论。从而说明,鼓励农村劳动力向非农部门转移的政策是必要的,与建设社会主义和谐社会的目标是一致的。     

Homo Economicus,AIs, humans and rats: decision-making and economic welfare

ABSTRACT

Critics of economics often highlight two related issues: the empirical falsity of the ‘homo economicus’ assumption of rational, self-interested maximisation; and the ethical consequences of models based on this assumption. Yet many experiments in biology show non-human creatures often seem to behave as if they were rational maximisers, suggesting that context rather than cognitive capacity is important for determining behaviour. The critique of rational choice poses a less serious methodological challenge to economics than is sometimes thought. However, economists do need to respond to the ethical critique that decisions and policies based on the assumption of rational self-interested maximisation change the norms of individual behaviour for the worse. This paper argues that economics has become divorced from ethics because for a century it has dealt only with ordinal, not cardinal, welfare rankings and has thus ruled out interpersonal comparisons. While enabling economists to separate normative from positive analysis, this separation protocol has left welfare economics both internally contradictory and unable to address major societal decisions, even though welfare economics is used constantly in limited ways, such as cost-benefit analysis. This separation reflects empirically inaccurate assumptions concerning preference formation and the conditions of supply and demand (but not the rational choice assumption) in the foundational welfare economic theorems. Economics must urgently revisit welfare economics, particularly in the context of modern economies in which individuals are increasingly interdependent, and the assumptions required for the fundamental welfare theorems therefore increasingly invalid.     

基于选择实验法的环境资源属性价值评价及实证研究

建立条件Logit模型和随机参数Logit模型,利用效用理论、福利经济学理论研究了滨海资源环境属性的重要性、边际价值以及环境资源状态改变对社会福利的影响。以大连市付家庄滨海公园为例,利用问卷调查数据进行实证研究。结果表明:随机参数Logit模型的拟合度比条件Logit模型要高、其回归效果更好;受访者对改善环境资源属性均持较为积极的态度,游客对环境资源属性的偏好程度由高到低为海水能见度、沙滩舒适度、沙滩清洁度和海洋生物种群数量;在付家庄滨海公园的当前环境下,游客的社会福利价值为64.82元/人,环境资源属性组合的最佳(最差)状态下游客的社会福利价值为127.12元/人(-18.18元/人),当前环境资源状态并非理想状态,还可以进一步改善。     

Restricted and Unrestricted Dominance for Welfare, Inequality, and Poverty Orderings

This paper extends the previous literature on the ethical links between the measurement of poverty, social welfare and inequality. We show inter alia, how, when the range of possible poverty lines is unbounded above, a robust ranking of absolute poverty may be interpreted as a robust ranking of social welfare, and a robust ranking of relative poverty may be interpreted as a robust ranking of inequality, and this, for any order of stochastic dominance.     

Paretian Welfare Judgements and Bergsonian Social Choice

Two distinct approaches can be identified in the new welfare economics. The school of thought based on the compensation principles attempted to see what can be said about social welfare without making interpersonal comparisons of well-being by extending the applicability of the Pareto principle through hypothetical compensatory payments between gainers and losers. The Bergson-Samuelson school of thought introduced the social welfare function as a formal method of introducing a Pareto-inclusive ethical belief on social welfare, whose policy implications we should theoretically explore. Synthesising these two approaches, this paper identifies a condition under which the new welfare economics is logically impeccable.     

The Contributions of Angus Deaton

Angus Deaton was awarded the 2015 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for his analysis of consumption, poverty, and welfare. This article reviews his contributions to economics. This article reviews his contributions to economics.     

SOCIALLY IMPROVING TAX REFORMS*

This article proposes graphical methods to determine whether commodity tax changes are “socially improving,” in the sense of improving social welfare or decreasing poverty for large classes of social welfare and poverty indices. It also shows how estimators of critical poverty lines and economic efficiency ratios can be used to characterize socially improving tax reforms. The methodology is illustrated using Mexican data.     

Nash Equilibrium and Welfare Optimality

If A is a set of social alternatives, a social choice rule (SCR) assigns a subset of A to each potential profile of individuals' preferences over A , where the subset is interpreted as the set of "welfare optima". A game form (or "mechanism") implements the social choice rule if, for any potential profile of preferences, (i) any welfare optimum can arise as a Nash equilibrium of the game form (implying, in particular, that a Nash equilibrium exists) and, (ii) all Nash equilibria are welfare optimal. The main result of this paper establishes that any SCR that satisfies two properties—monotonicity and no veto power—can be implemented by a game form if there are three or more individuals. The proof is constructive.     

Measurement of Changes in Economic Welfare in India: 1970–2001

This paper provides time series estimates of measures of economic welfare, inequality, decile class specific true cost of living index and poverty measures based on 20 rounds of National Sample Survey data for the period 1970–2001. It has estimated piece-wise Linear Expenditure System (LES) for very poor, moderately poor, non-poor low and non-poor high expenditure groups for rural as well as urban areas. Money metric utility for deciles are derived from the money metric utility function and social welfare index is constructed by aggregating metric utility of the deciles. Using social welfare index as well as real per capita consumption, the paper analyses the changes in economic welfare over the three decades. Using conventional measures, the paper analyses the changes in poverty and inequality during 1970–2001. The paper also provides estimates of the welfare effects of commodity prices.

     

Poverty and inequality under income and price dispersions

Abstract.  We introduce an analytical framework for welfare analysis that accounts for changes in the joint distribution of prices and incomes by using parametric formulae of poverty and inequality measures. We propose statistical indicators for the levels, variabilities and a statistical link of price indices and nominal living standards, which are consistent with a bivariate lognormal model. Our analysis provides intuitive insight about the social welfare impact of economic shocks affecting levels, variabilities, and correlation of prices and incomes. The roles of price and income variabilities for poverty and inequality are exhibited, with the possibility of several variation regimes. JEL classification: I32, O15, D31     

Was Bentham a primitive rational choice theory predecessor?

This paper challenges the view of Jeremy Bentham as a primitive predecessor of rational choice theory and welfare economics. The psychological hedonism in Bentham is of a rather weak form – net pleasure motivates behaviour, but we are not always capable of its maximisation. Thus, the outcome of our choices is not necessarily in our best interest and the aggregation of our revealed preferences is not necessarily a good indicator of general happiness. The bottom line is that the underpinnings of Bentham's utilitarianism are better aligned with contemporary psychological theory than previously thought, which puts his ethical thinking on firmer ground.     

Attitudes Toward Catastrophe

In light of climate change and other global threats, policy commentators sometimes urge that society should be more concerned about catastrophes. This paper reflects on what society’s attitude toward low-probability, high-impact events is, or should be. We first argue that catastrophe risk can be conceived of as a spread in the distribution of losses. Based on this conception, we review studies from decision sciences, psychology, and behavioral economics that explore people’s attitudes toward various social risks. Contray to popular belief, we find more evidence against than in favor of catastrophe aversion—the preference for a mean-preserving contraction of the loss distribution—and discuss a number of possible behavioral explanations. Next, we turn to social choice theory and examine how various social welfare functions handle catastrophe risk. We explain why catastrophe aversion may be in conflict with equity concerns and other-regarding preferences. Finally, we discuss current approaches to evaluate and regulate catastrophe risk.     

资产建设理论视阈下农村贫困救助政策的启示

以资产为基础的社会政策是对穷人的福利政策方向的一个基本改变。对个人发展账户进行分析,将"资产建设"这个新理念引入我国农村贫困救助政策,比较两种以资产为基础的贫困救助政策:个人发展账户和村级互助基金,发现:为贫困者设立个人账户并建立村级互助资金,是适合我国国情的资产政策。     

Choice, preference and rationalizability in pareto’s theory of economic behavior

Pareto initiated the shift of economic theory from utility/preference to choice in order to fill a gap between theoretical and empirical economics. His suggestions for an empirically-oriented theory of choice were to be developed decades later in the literature on revealed preference and on the conditions of equivalence between preference-based and choice-based axiomatic structures. In the process, however, substantial departures from Pareto’s implicit design of the situation of choice were introduced. In this paper, the conditions for the rationalizability of choice are re-defined so that they fit the type of situation that Pareto had in mind. The result is that the main consistency axioms of standard choice theory have to give way to a different combination of axioms that concern decisiveness as well as consistency. (JEL:B13, D01, D11).     

社会选择的实证之维——当代西方实证社会选择理论评述

当代行为经济学和实验经济学领域的研究越来越关注社会公平正义问题。实证社会选择理论从实证角度研究人们对于公平分配的观念,体现了当代规范经济学与实证经济学的有机结合。在长期大量的实证研究的基础上,实证社会选择理论检验了关于分配正义的很多基础理论,得到了一些重要发现。实证社会选择理论的研究,对于中国的经济学理论建设和改革实践,也具有重要的启发价值和参考意义。     

The Discretionary Economy

Some critics allege that many if not most economists are subject to "Panglossian tendencies" — that is, they are too quick to make excuses for apparently dysfunctional aspects of the status quo. This paper examines theoretical welfare economics as a possible exemplar of "Panglossian tendencies." A major focus is on the absence from both the pedagogic and the professional literatures of two key concepts bearing upon the evaluation of Pareto efficiency and social welfare maximization as competing criteria of economic policy analysis: the "isowelfare function" and the "supra-welfare region." These concepts are explicated herein using the familiar Edgeworth-Bowley box diagram illustrating the twoindividual, two-good pure exchange model. A higher level of awareness and appreciation among economists of these concepts might serve the beneficial purpose of downgrading the perceived significance of Pareto efficiency as an operational criterion of economic performance.