Is it time to reboot welfare economics? Overview

The contributions of economists have long included both positive explanations of how economic systems work and normative recommendations for how they could and should work better. In recent decades, economics has taken a strong empirical turn as well as having a greater appreciation of the importance of the complexities of real-world human behaviour, institutions, the strengths and failures of markets, and interlinkages with other systems, including politics, technology, culture and the environment. This shift has also brought greater relevance and pragmatism to normative economics. While this shift towards evidence and pragmatism has been welcome, it does not in itself answer the core question of what exactly constitutes ‘better’, and for whom, and how to manage inevitable conflicts and trade-offs in society. These have long been the core concerns of welfare economics. Yet, in the 1980s and 1990s, debates on welfare economics seemed to have become marginalised. The articles in this Fiscal Studies symposium engage with the question of how to revive normative questions as a central issue in economic scholarship.     

Drivers of autonomous vehicles—analyzing consumer preferences for self-driving car brand extensions

Autonomous cars are considered to be the next disruptive innovation that will affect consumers. It can be expected that not only traditional automakers will enter this market (e.g., Ford) but also technology companies (e.g., Google) and newer companies dedicated to self-driving cars (e.g., Tesla). We take a brand extension perspective and analyze to what extent consumers prefer autonomous cars from these brand categories. Our empirical study is based on discrete choice experiments about adopting autonomous vehicles in a purchase scenario and in a renting context. Our findings show that brands play a central role when making autonomous driving decisions. Brand preferences differ systematically when buying versus renting a self-driving car. While technology brands are most preferred overall, consumers favor automaker brands over new brands only when purchasing, not when renting. We further disentangle the brand strength into the marginal effects of image associations. For example, Google’s strong brand positioning can be explained by experiences with the parent brand, but it could still improve brand strength by highlighting the relevance of the associated brand portfolio for self-driving cars. The effect of these brand extension success factors differs between parent-brand categories and also between the renting and purchasing scenarios, which requires a dedicated brand management.

     

New approaches to measuring welfare

Economics has traditionally understood ‘welfare’ (what makes a life go well) as the satisfaction of preference. This conceptualisation of welfare is typically measured using revealed preferences, proxied through income and prices or stated in willingness-to-pay surveys. Recent decades have seen growing challenges to this paradigm. The climate crisis, among other phenomena, has called into question whether income and price data effectively proxy preferences, and willingness-to-pay surveys continue to struggle with accurately pricing important items such as biodiversity, digital goods, privacy and social connections. Preference satisfaction as a welfare criterion has also been challenged conceptually by psychologists and scholars working in the development space, among others. In this article, we review recent innovations in alternate ways of conceptualising and measuring welfare for the purposes of economic welfare analysis. We focus on using stated preferences over aspects of well-being, life-satisfaction scales and the WELLBY approach, and well-being frameworks such as Bhutan's Gross National Happiness Index. While not without weaknesses, these approaches also have marked strengths relative to the traditional approach.     

Truly standard-essential patents? A semantics-based analysis

Standard-essential patents (SEPs) have become a key element of technical coordination via standard-setting organizations. Yet, in many cases, it remains unclear whether a declared SEP is truly standard-essential. To date, there is no automated procedure that allows for a scalable and objective assessment of SEP status. This paper introduces a semantics-based method for approximating the standard essentiality of patents. We provide details on the procedure that generates the measure of standard essentiality and present the results of several validation and robustness exercises. We illustrate the measure's usefulness in estimating the share of true SEPs in firm patent portfolios for several telecommunication standards.