Predictive Power In Behavioral Welfare Economics

Bouacida, Elias and Martin, Daniel (2021) Predictive Power In Behavioral Welfare Economics. Journal of the European Economic Association, 19 (3). 1556–1591. ISSN 1542-4766

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When choices are inconsistent due to behavioral biases, there is a theoretical debate about whether the structure of a model is necessary for providing precise welfare guidance based on those choices. To address this question empirically, we use standard data sets from the lab and field to evaluate the predictive power of two “model-free” approaches to behavioral welfare analysis. We find they typically have high predictive power, which means there is little ambiguity about what should be selected from each choice set. We also identify properties of revealed preferences that help to explain the predictive power of these approaches.

Item Type:
Journal Article
Journal or Publication Title:
Journal of the European Economic Association
Additional Information:
This is a pre-copy-editing, author-produced PDF of an article accepted for publication in British Journal for the Philosophy of Science following peer review. The definitive publisher-authenticated version Elias Bouacida, Daniel Martin, Predictive Power in Behavioral Welfare Economics, Journal of the European Economic Association, Volume 19, Issue 3, June 2021, Pages 1556–1591, is available online at:
Uncontrolled Keywords:
?? welfare economicsbehavioral economicspredictive powerrevealed preferenceseconomics, econometrics and finance(all)i30c91d12 ??
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19 Aug 2020 08:30
Last Modified:
15 Jul 2024 20:51