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Cass R. Sunstein, Welfare Now, Duke L. J. (forthcoming 2023).


Abstract: Behaviorally informed interventions include nudges, taxes, subsidies, bans, and mandates. In evaluating such interventions, policymakers should consider both their welfare effects (including, for example, their potentially negative effects on subjective well-being) and their effects on distributive justice (including, for example, their potentially negative effects on those at the bottom of the economic ladder). Preference satisfaction matters to welfare, but preference satisfaction is not foundational: People might prefer Option A over Option B, but if Option B produces more welfare than Option A, we should not celebrate a situation in which everyone ends up with Option A. The arguments for investigating welfare effects, and effects on distributive justice, are meant as objections to efforts to evaluate behaviorally informed interventions solely in terms of (for example) ex ante revealed preferences and effects on participation rates. The arguments are also meant as pleas for analysis of the distributive effects of such interventions and for specification and investigation of their welfare effects, including their effects on experienced well-being. A pervasive concern is that behaviorally informed interventions might have negative welfare effects on subjective well-being that are easily ignored – as, for example, when information disclosure makes people sad or scared, or when a shift to healthier eating makes people enjoy their meals less. At the same time, such interventions might have positive effects on subjective well-being that are easily ignored – as, for example, when information disclosure makes people feel confident and safe, or when a shift to healthier eating makes people enjoy their meals more.