IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-00807687.html
   My bibliography  Save this paper

From welfare to preferences, do decision flaws matter? The case of tuition fees

Author

Listed:
  • Guilhem Lecouteux

    () (Department of Economics, Ecole Polytechnique - X - École polytechnique - CNRS - Centre National de la Recherche Scientifique)

  • Léonard Moulin

    (UP13 - Université Paris 13)

Abstract

We investigate the relation between welfare and preference satisfaction in economics, and show that the extension of the scope of economic analysis through the 20th century forces economists to question the validity of the preference satisfaction criterion as a normative criterion for evaluating public policies. We then argue that welfare economists should clarify the normative content of this criterion in order to properly design public policies. We illustrate our point with the case of the selection at the entry of university, and show that, according to the normative criterion used by the social planner, the optimal policy radically changes. In particular, we argue that -- if we adopt a paternalistic conception of welfare -- it becomes necessary to establish a clear distinction between preference and welfare, and to integrate the different social and psychological biases that can influence the decision of the individuals in the design of public policies.

Suggested Citation

  • Guilhem Lecouteux & Léonard Moulin, 2013. "From welfare to preferences, do decision flaws matter? The case of tuition fees," Working Papers hal-00807687, HAL.
  • Handle: RePEc:hal:wpaper:hal-00807687
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00807687
    as

    Download full text from publisher

    File URL: https://hal.archives-ouvertes.fr/hal-00807687/document
    Download Restriction: no

    References listed on IDEAS

    as
    1. Robert Sugden, 2004. "The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences," American Economic Review, American Economic Association, vol. 94(4), pages 1014-1033, September.
    2. Betts, Julian R, 1998. "The Impact of Educational Standards on the Level and Distribution of Earnings," American Economic Review, American Economic Association, vol. 88(1), pages 266-275, March.
    3. Robert J. Gary-Bobo & Alain Trannoy, 2008. "Efficient Tuition Fees and Examinations," Journal of the European Economic Association, MIT Press, vol. 6(6), pages 1211-1243, December.
    4. del Rey, Elena & Romero, Laura, 2004. "Prices versus Exams as Strategic Instruments for Competing Universities," Working Papers of the Department of Economics, University of Girona 12, Department of Economics, University of Girona.
    5. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    6. Becker, Gary S, 1993. "Nobel Lecture: The Economic Way of Looking at Behavior," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 385-409, June.
    7. Luigino Bruni & Robert Sugden, 2007. "The road not taken: how psychology was removed from economics, and how it might be brought back," Economic Journal, Royal Economic Society, vol. 117(516), pages 146-173, January.
    8. repec:hal:cepnwp:hal-00749625 is not listed on IDEAS
    9. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107695122.
    10. Ben McQuillin & Robert Sugden, 2012. "Reconciling normative and behavioural economics: the problems to be solved," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(4), pages 553-567, April.
    11. Raquel Fernandez, 1998. "Education and Borrowing Constraints: Tests vs. Prices," NBER Working Papers 6588, National Bureau of Economic Research, Inc.
    12. Robert Haveman & Barbara Wolfe, 1995. "The Determinants of Children's Attainments: A Review of Methods and Findings," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1829-1878, December.
    13. Lionel Page, 2005. "Des inégalités sociales aux inégalités scolaires. Choix éducatifs et Prospect Theory," Revue économique, Presses de Sciences-Po, vol. 56(3), pages 615-623.
    14. Hausman,Daniel M., 2012. "Preference, Value, Choice, and Welfare," Cambridge Books, Cambridge University Press, number 9781107015432.
    15. Sen, Amartya K, 1973. "Behaviour and the Concept of Preference," Economica, London School of Economics and Political Science, vol. 40(159), pages 241-259, August.
    16. Cass R. Sunstein & Richard H. Thaler, 2003. "Libertarian paternalism is not an oxymoron," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
    17. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    18. Robert Gary-Bobo & Alain Trannoy, 2005. "Faut-il augmenter les droits d'inscription à l'université ?," Revue Française d'Économie, Programme National Persée, vol. 19(3), pages 189-237.
    19. David Flacher & Hugo Harari-Kermadec & Léonard Moulin, 2012. "Faut-il (vraiment) augmenter les frais d'inscription à l'université ?," Revue française d'économie, Presses de Sciences-Po, vol. 0(3), pages 145-183.
    20. Jevons, William Stanley, 1871. "The Theory of Political Economy," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number jevons1871.
    21. Robert Sugden, 2007. "The value of opportunities over time when preferences are unstable," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 29(4), pages 665-682, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    preferences; welfare; prospect theory; tuition fees;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:hal:wpaper:hal-00807687. 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: (CCSD). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.