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Aggregating Local Preferences to Guide Marginal Policy Adjustments

Author

Listed:
  • Daniel J. Benjamin
  • Ori Heffetz
  • Miles S. Kimball
  • Nichole Szembrot

Abstract

We propose a social choice rule for aggregating preferences elicited from surveys into a marginal adjustment of policy from the status quo. The mechanism is: (i) symmetric in its treatment of survey respondents; (ii) ordinal, using only the orientation of respondents' indifference surfaces; (iii) local, using only preferences in the neighborhood of current policy; and (iv) what we call "first-order strategy-proof," making the gains from misreporting preferences second order. The mechanism could be applied to guide policy based on how policy affects responses to subjective well-being surveys.

Suggested Citation

  • Daniel J. Benjamin & Ori Heffetz & Miles S. Kimball & Nichole Szembrot, 2013. "Aggregating Local Preferences to Guide Marginal Policy Adjustments," NBER Working Papers 18787, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18787
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    References listed on IDEAS

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    1. Fleurbaey, Marc & Suzumura, Kotaro & Tadenuma, Koichi, 2005. "Arrovian aggregation in economic environments: how much should we know about indifference surfaces?," Journal of Economic Theory, Elsevier, vol. 124(1), pages 22-44, September.
    2. Daniel J. Benjamin & Ori Heffetz & Miles S. Kimball & Nichole Szembrot, 2014. "Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference," American Economic Review, American Economic Association, vol. 104(9), pages 2698-2735, September.
    3. Feldstein, Martin, 1976. "On the theory of tax reform," Journal of Public Economics, Elsevier, vol. 6(1-2), pages 77-104.
    4. Daniel J. Benjamin & Ori Heffetz & Miles S. Kimball & Alex Rees-Jones, 2012. "What Do You Think Would Make You Happier? What Do You Think You Would Choose?," American Economic Review, American Economic Association, vol. 102(5), pages 2083-2110, August.
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    Cited by:

    1. Clemens Hetschko & Louisa von Reumont & Ronnie Schöb, 2017. "Embedding as a Pitfall for Survey-Based Welfare Indicators: Evidence from an Experiment," CESifo Working Paper Series 6419, CESifo Group Munich.
    2. repec:kap:pubcho:v:172:y:2017:i:1:d:10.1007_s11127-017-0411-6 is not listed on IDEAS
    3. repec:kap:pubcho:v:172:y:2017:i:1:d:10.1007_s11127-017-0414-3 is not listed on IDEAS

    More about this item

    JEL classification:

    • D69 - Microeconomics - - Welfare Economics - - - Other
    • H0 - Public Economics - - General
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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