Preference satisfaction and welfare economics

Economics and Philosophy 25 (1):1-25 (2009)
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Abstract

The tenuous claims of cost-benefit analysis to guide policy so as to promote welfare turn on measuring welfare by preference satisfaction and taking willingness-to-pay to indicate preferences. Yet it is obvious that people's preferences are not always self-interested and that false beliefs may lead people to prefer what is worse for them even when people are self-interested. So welfare is not preference satisfaction, and hence it appears that cost-benefit analysis and welfare economics in general rely on a mistaken theory of well-being. This essay explores the difficulties, criticizes standard defences of welfare economics, and then offers a new partial defence that maintains that welfare economics is independent of any philosophical theory of well-being. Welfare economics requires nothing more than anevidentialconnection between preference and welfare: in circumstances in which people are concerned with their own interests and reasonably good judges of what will serve their interests, their preferences will be reliable indicators of what is good for them.

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Daniel Hausman
University of Wisconsin, Madison

Citations of this work

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Hedonism and Welfare Economics.Daniel M. Hausman - 2010 - Economics and Philosophy 26 (3):321-344.
Philosophy of Economics.Daniel M. Hausman - 2008 - Stanford Encyclopedia of Philosophy.

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References found in this work

What We Owe to Each Other.Thomas Scanlon - 1998 - Belknap Press of Harvard University Press.
Reasons and Persons.Derek Parfit - 1984 - Oxford University Press.
The View From Nowhere.Thomas Nagel - 1986 - Oxford University Press.
Freedom of the Will and the Concept of a Person.Harry Frankfurt - 1971 - Journal of Philosophy 68 (1):5-20.
Morals by Agreement.David P. Gauthier - 1986 - Oxford University Press.

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