Economics is permeated with value judgements, and removing them would be neither possible nor desirable. They are consequential, in the sense that they have a sizeable impact on economists’ output. Yet many economists may not even realise they are there. This paper surveys ways in which values influence economic theory and practice and explores some implications for the manner in which economics – especially welfare economics – is taught, practised and communicated. Explicit attention to values needs to be embedded in the teaching of economics at all levels.

Daniel M. Hausman holds that preferences in economics are total subjective comparative evaluations—subjective judgments to the effect that something is better than something else all things told—and that economists are right to employ this conception of preference. Here, I argue against both parts of Hausman’s thesis. The failure of Hausman’s account, I continue, reflects a deeper problem, that is, that preferences in economics do not need an explicit definition of the kind that he seeks. Nonetheless, Hausman’s labors were not in vain: his accomplishment is that he has articulated a useful model of the theory.

ABSTRACT Behavioral economics has long defined itself in opposition to neoclassical economics, but recent developments suggest a synthesis may be on the horizon. In particular, several economists have argued that behavioral factors can be incorporated into standard theory, and that the days of behavioral economics are therefore numbered. This paper explores the proposed synthesis and argues that it is distinctly behavioral in nature – not neoclassical. Far from indicating that behavioral economics as a stand-alone research program is over, the proposed synthesis represents the consummate conversion of neoclassical economists into behavioral ones. GRAPHICAL ABSTRACT

This study employs a novel experimental paradigm to examine crowdout effects in volunteering. Using a framework modelled upon money donation experiments, we examine the impact of forced' volunteering on the amount of time volunteered. We find that subjects exposed to forced volunteering on the mean voluntarily donate less time than subjects in the control condition. Among religious subjects, the crowdout is 52.8%, suggesting warm-glow giving. Among non-religious subjects, the crowdout is 138%, implying altruistic giving. Thus, policies mandating volunteer activity may be associated with sizeable crowdout effects and might have heterogeneous effects across subpopulations.

A Course in Behavioral Economics 2e is an accessible and self-contained introduction to the field of behavioral economics. The author introduces students to the subject by comparing and contrasting ...

The third, and last, comment is that a novelty announced in the book—the project to base naturalization in economics on natural philosophy —sounds rather odd. “Natural philosophy,” an English translation for the Latin philosophia naturalis , shows up in the early eighteenth century and persists up to about 1850 as a name for “science,” substituted after 1850 by the latter term. Naturphilosophie is instead a German term indicating Friedrich Schelling’s own scientifi co-philosophical approach to the study of nature and its Romantic follow-up (Kaulbach 1984 ). The term is used occasionally in contemporary spoken German, referring strictly to metaphysical world views of the Edward Wilson kind cherished by non-academic currents such as the New Age and Deep Ecology. But the source of confusion in the book is that natural philosophy is not a passable translation for Naturphilosophie .

Armed with a set of economic theories and a desire to influence policy and improve lives, behavioral economists have developed a doctrine variously referred to as libertarian, light/soft, or asymmetric paternalism, and a series of policy proposals collectively referred to as the nudge agenda. To its advocates, the nudge agenda allows us to improve people’s choices and thereby their well-being on their own terms at minimal cost and without interfering with their liberty or autonomy. To its critics, the nudge agenda represents an ineffective and dangerous intrusion into the sphere of personal decision-making by bureaucrats who may be no better at making decisions than the people whose choices they are trying to improve. This paper reviews what libertarian paternalism and the nudge agenda are, how their foundations differ (or not) from those of neoclassical economics, and what their promises and limitations might be.

This chapter explores accounts of individual and social welfare underlying contemporary welfare economics. It argues that there is a one-to-one mapping between three prominent approaches to welfare assessment and three philosophical accounts of individual well-being: while standard economics is based on preference-satisfaction accounts, the economics of happiness is based on mental-state accounts, and the social-indicators / capability approach on objective-list accounts. Moreover, it argues that at least standard economics and the economics of happiness are based on some utilitarian social welfare criterion. The discussion underscores how economists both use and produce philosophy in their scientific practice, and consequently how economists and philosophers may have much to learn from each other.

This paper examines issues of ontology and methodology in behavioral economics: the attempt to increase the explanatory and predictive power of economic theory by providing it with more psychologically plausible foundations. Of special interest is the epistemological status of neoclassical economic theory within behavioral economics, the runaway success story of contemporary economics. Behavioral economists aspire to replace the fundamental assumptions of orthodox, neoclassical economic theory. Yet, behavioral economists have gone out of their way to praise those very assumptions. Matthew Rabin, for example, writes that behavioral economics “is not only built on the premise that [orthodox] economic methods are great, but also that most mainstream economic assumptions are great.” These apparently contradictory attitudes toward neoclassical theory raises the question of what, exactly, its epistemological status within behavioral economics is. This paper argues that the paradox can be resolved, and the question answered, by thinking of the epistemological status of neoclassical theory within behavioral economics in terms of Max Weber’s ideal types: analytical constructs that are not intended to be descriptively true of anything but which nevertheless can be used for a variety of theoretical purposes. The analysis is consistent with many of the insights from the philosophical literature on models in science and has important implications for the practice of economics – behavioral and neoclassical – as well as for the very nature of rationality.

This paper examines issues of ontology and methodology in behavioral economics: the attempt to increase the explanatory and predictive power of economic theory by providing it with more psychologically plausible foundations. Of special interest is the epistemological status of neoclassical economic theory within behavioral economics, the runaway success story of contemporary economics. Behavioral economists aspire to replace the fundamental assumptions of orthodox, neoclassical economic theory. Yet, behavioral economists have gone out of their way to praise those very assumptions. Matthew Rabin, for example, writes that behavioral economics “is not only built on the premise that [orthodox] economic methods are great, but also that most mainstream economic assumptions are great.” These apparently contradictory attitudes toward neoclassical theory raises the question of what, exactly, its epistemological status within behavioral economics is. This paper argues that the paradox can be resolved, and the question answered, by thinking of the epistemological status of neoclassical theory within behavioral economics in terms of Max Weber’s ideal types: analytical constructs that are not intended to be descriptively true of anything but which nevertheless can be used for a variety of theoretical purposes. The analysis is consistent with many of the insights from the philosophical literature on models in science and has important implications for the practice of economics—behavioral and neoclassical—as well as for the very nature of rationality.

The purpose of this paper is to give a principled answer to the question of under what conditions measures of happiness or life satisfaction, understood as subjectively experienced mental states, can serve as proxies for well-being. According to a widely held view, measures of happiness and life satisfaction represent well-being because happiness and life satisfaction are constitutive of well-being. This position, however, is untenable. Efforts to address this question in terms of Amartya Sen's capability approach have been similarly unsuccessful. Instead, I argue, happiness and life satisfaction matter because, and insofar as, people want to be happy and/or satisfied; consequently, measures of happiness and life satisfaction can serve as measures of well-being whenever happiness is sufficiently correlated with or causally efficacious in bringing about greater preference satisfaction. While this position entails a less expansive view of the uses of happiness and life satisfaction measures, I maintain that if their proponents were to take this line, many of the objections to their enterprise can be met.

The hypothesis that the degree to which disease disrupts daily functioning is inversely associated with happiness is widely accepted, yet existing literature offers little direct evidence in its support. This paper explores the hypothesized association in a community-based sample of 383 older adults. To assess the degree to which disease disrupts daily functioning we developed a measure—called the freedom-from-debility score—based on four Short Form-12 (SF-12) Health Survey questions explicitly designed to represent “limitations in physical activities because of health problems” and “limitations in usual role activities because of physical health problems.” The results were consistent with the hypothesis. When participants were divided into categories based on their freedom-from-debility score, median happiness scores were monotonically increasing across categories. Controlling for demographic and socio-economic factors as well as health status (measured both subjectively and objectively), a one-point increase in freedom-from-debility score (on a scale from 0 to 100) was associated with a three-percent reduction in the odds of lower-quartile happiness. The results support the contention that health status is one of the most influential predictors of happiness, that the association between health status and happiness depends greatly on the manner in which health status is measured, and that the degree to which disease disrupts daily functioning is inversely associated with happiness.

Much recent philosophical literature on happiness and satisfaction is based on the belief that empirical research is relevant to philosophical conclusions. In his 2010 book What is This Thing Called Happiness? Fred Feldman begs to differ. He suggests (a) that there is no evidence that empirical research is relevant to long-standing philosophical questions; consequently, (b) that philosophers have little reason to pay attention to the work of psychologists or economists; and (c) that philosophers need not fear embarrassing themselves by being ignorant of important scientific findings that bear directly on their work. Relying on an example invoked by Feldman himself, this paper makes the case that all three theses are false. The argument suggests a picture according to which science and philosophy stand in a symbiotic relationship, with scientists and philosophers engaging in a mutually beneficial exchange of ideas for the advancement of the general knowledge.

A ubiquitous argument against mental-state accounts of well-being is based on the notion that mental states like happiness and satisfaction simply cannot be measured. The purpose of this paper is to articulate and to assess this “argument from measurability.” My main thesis is that the argument fails: on the most charitable interpretation, it relies on the false proposition that measurement requires the existence of an observable ordering satisfying conditions like transitivity. The failure of the argument from measurability, however, does not translate into a defense of mental-state accounts as accounts of well-being or of measures of happiness and satisfaction as measures of well-being. Indeed, I argue, the ubiquity of the argument from measurability may have obscured other, very real problems associated with mental-state accounts of well-being – above all, that happiness and satisfaction fail to track well-being – and with measures of happiness and satisfaction – above all, the tendency toward reification. I conclude that the central problem associated with the measurement of, e.g., happiness as a subjectively experienced mental state is not that it is too hard to measure, but rather that it is too easy to measure.

The Oxford Handbook of Happiness is the most comprehensive single volume on the subject of happiness. This long-anticipated landmark collection, along with the similarly ambitious Encyclopedia of Quality of Life Research (A. Michalos, ed. 2013, Springer) shows happiness scholarship coming of age and spreading outward into new themes and disciplines as well as forward into policy and practice. The book takes a broad definition of happiness and its contents span positive psychology and interdisciplinary (but psychology-focused) happiness studies. On the whole, the handbook is a remarkable achievement in that it covers most of the basic contemporary knowledge about happiness as well as giving glimpses of more advanced and specific findings.