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Accounting for Heterogeneity, Diversity and General Equilibrium in Evaluating Social Programmes

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  • Heckman, James

Abstract

This paper considers the merits and limitations of alternative criteria proposed to evaluate social programmes in the modern welfare state and the information required to implement them when individual responses to programmes are heterogeneous. Participation in programmes is based, in part, on this heterogeneity and the programmes have general equilibrium impacts on the economy. Particular attention is devoted to the voting criterion used in modern positive political economy and the ranking of alternative social states based on anonymity postulates. Evidence on heterogeneity is presented. Conflicts among the criteria are revealed in two empirical studies. Partial equilibrium approaches are shown to be misleading.

Suggested Citation

  • Heckman, James, 2001. "Accounting for Heterogeneity, Diversity and General Equilibrium in Evaluating Social Programmes," Economic Journal, Royal Economic Society, vol. 111(475), pages 654-699, November.
    • Handle: RePEc:ecj:econjl:v:111:y:2001:i:475:p:f654-99
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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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