IDEAS home Printed from
   My bibliography  Save this paper

Extending the Informational Basis of Welfare Economics: The Case of Preference Dynamics


  • Ulrich Witt


  • Christian Schubert



Normative reasoning in welfare economics and social contract theory usually presumes invariable, context-independent individual preferences. Following recent work particularly in behavioral economics this assumption is difficult to defend. This paper therefore explores what can be said about preferences and their changes from a motivation-theoretic perspective, i.e. by explaining what motivates economic agents in making their choices and what mechanisms of change are at work here. We show that on this basis it is possible to complement social welfare assessments by a differential weighing of different human motivations which is derived from empirically informed foundations rather than from ad hoc arguments.

Suggested Citation

  • Ulrich Witt & Christian Schubert, 2010. "Extending the Informational Basis of Welfare Economics: The Case of Preference Dynamics," Papers on Economics and Evolution 2010-05, Philipps University Marburg, Department of Geography.
  • Handle: RePEc:esi:evopap:2010-05

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Paul Anand & Graham Hunter & Ron Smith, 2005. "Capabilities and Well-Being: Evidence Based on the Sen–Nussbaum Approach to Welfare," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 74(1), pages 9-55, October.
    2. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
    3. Betsey Stevenson & Justin Wolfers, 2008. "Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 1-102.
    4. Alkire, Sabina, 2005. "Valuing Freedoms: Sen's Capability Approach and Poverty Reduction," OUP Catalogue, Oxford University Press, number 9780199283316.
    5. Alkire, Sabina, 2002. "Dimensions of Human Development," World Development, Elsevier, vol. 30(2), pages 181-205, February.
    6. Leonardo Becchetti & Alessandra Pelloni & Fiammetta Rossetti, 2008. "Relational Goods, Sociability, and Happiness," Kyklos, Wiley Blackwell, vol. 61(3), pages 343-363, August.
    7. Johnston, David W. & Propper, Carol & Shields, Michael A., 2009. "Comparing subjective and objective measures of health: Evidence from hypertension for the income/health gradient," Journal of Health Economics, Elsevier, vol. 28(3), pages 540-552, May.
    8. Grossman, Michael, 2006. "Education and Nonmarket Outcomes," Handbook of the Economics of Education, Elsevier.
    9. Mozaffar Qizilbash, 2002. "Development, Common Foes and Shared Values," Review of Political Economy, Taylor & Francis Journals, vol. 14(4), pages 463-480.
    10. Anand, Paul & van Hees, Martin, 2006. "Capabilities and achievements: An empirical study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 35(2), pages 268-284, April.
    11. Gardner, Jonathan & Oswald, Andrew J., 2007. "Money and mental wellbeing: A longitudinal study of medium-sized lottery wins," Journal of Health Economics, Elsevier, vol. 26(1), pages 49-60, January.
    12. Graham, Carol & Eggers, Andrew & Sukhtankar, Sandip, 2004. "Does happiness pay?: An exploration based on panel data from Russia," Journal of Economic Behavior & Organization, Elsevier, vol. 55(3), pages 319-342, November.
    13. James P. Smith, 1999. "Healthy Bodies and Thick Wallets: The Dual Relation between Health and Economic Status," Journal of Economic Perspectives, American Economic Association, vol. 13(2), pages 145-166, Spring.
    14. Gardner, Jonathan & Oswald, Andrew, 2004. "How is mortality affected by money, marriage, and stress?," Journal of Health Economics, Elsevier, vol. 23(6), pages 1181-1207, November.
    15. Andrew E. Clark & Paul Frijters & Michael A. Shields, 2008. "Relative Income, Happiness, and Utility: An Explanation for the Easterlin Paradox and Other Puzzles," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 95-144, March.
    16. Alex Coad, 2010. "Exploring the processes of firm growth: evidence from a vector auto-regression," Industrial and Corporate Change, Oxford University Press, vol. 19(6), pages 1677-1703, December.
    17. Martin Binder & Alex Coad, 2009. "An Examination of the Dynamics of Happiness Using Vector Autoregressions," Papers on Economics and Evolution 2009-04, Philipps University Marburg, Department of Geography.
    18. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, July.
    19. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    20. Stanislav Kolenikov & Gustavo Angeles, 2009. "Socioeconomic Status Measurement With Discrete Proxy Variables: Is Principal Component Analysis A Reliable Answer?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(1), pages 128-165, March.
    21. van Praag, Bernard M. S., 1991. "Ordinal and cardinal utility : An integration of the two dimensions of the welfare concept," Journal of Econometrics, Elsevier, vol. 50(1-2), pages 69-89, October.
    22. Michael A. Shields & Stephen Wheatley Price, 2005. "Exploring the economic and social determinants of psychological well-being and perceived social support in England," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(3), pages 513-537.
    23. Ramos, Xavier, 2005. "Using Efficiency Analysis to Measure Individual Well-Being with an Illustration for Catalonia," IZA Discussion Papers 1748, Institute for the Study of Labor (IZA).
    24. Jose Manuel Roche, 2008. "Monitoring Inequality among Social Groups: A Methodology Combining Fuzzy Set Theory and Principal Component Analysis," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 9(3), pages 427-452.
    25. Xavier Ramos & Jacques Silber, 2005. "On The Application Of Efficiency Analysis To The Study Of The Dimensions Of Human Development," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 285-309, June.
    26. Asghar Zaidi & Tania Burchardt, 2005. "Comparing Incomes When Needs Differ: Equivalization For The Extra Costs Of Disability In The U.K," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(1), pages 89-114, March.
    27. McClements, L. D., 1977. "Equivalence scales for children," Journal of Public Economics, Elsevier, vol. 8(2), pages 191-210, October.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Leonhard K. Lades, 2012. "The impact of differential satiation dynamics on changing consumer behavior, wellbeing, and innovative activity," Papers on Economics and Evolution 2012-16, Philipps University Marburg, Department of Geography.
    2. Safarzyńska, Karolina, 2013. "Evolutionary-economic policies for sustainable consumption," Ecological Economics, Elsevier, vol. 90(C), pages 187-195.
    3. Lades, Leonhard K., 2014. "Impulsive consumption and reflexive thought: Nudging ethical consumer behavior," Journal of Economic Psychology, Elsevier, vol. 41(C), pages 114-128.
    4. Ulrich Witt, 2011. "Sustainability and the Problem of Consumption," Papers on Economics and Evolution 2011-16, Philipps University Marburg, Department of Geography.
    5. Christian Schubert, 2012. "Is novelty always a good thing? Towards an evolutionary welfare economics," Journal of Evolutionary Economics, Springer, vol. 22(3), pages 585-619, July.
    6. Benjamin Volland, 2013. "On the intergenerational transmission of preferences," Journal of Bioeconomics, Springer, vol. 15(3), pages 217-249, October.

    More about this item


    Preference Change; Welfare; Needs; Subsistence Level; Redistribution Length 31 pages;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:esi:evopap:2010-05. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christoph Mengs). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.