- Series Information
- The Oxford Handbook of Well-Being and Public Policy
- List of Contributors
- Cost-Benefit Analysis
- Inequality and Poverty Measures
- Social Welfare Functions
- QALY-Based Cost-Effectiveness Analysis
- Fair Allocation
- Social Ordering Functions
- Multidimensional Indicators of Inequality and Poverty
- Happiness-Based Policy Analysis
- Preference-Based Views of Well-Being
- Mental State Approaches to Well-Being
- Objective Goods
- Subjective Well-Being in Psychology
- Subjective Well-Being in Economics
- Equivalent Income
- Extended Preferences
- SWB as a Measure of Individual Well-Being
- Does the Choice of Well-Being Measure Matter Empirically?
- Does Fairness Require a Multidimensional Approach?
- The Capability Approach and Well-Being Measurement for Public Policy
- Measuring Poverty: A Proposal
- Multidimensional Poverty Indices: A Critical Assessment
- Social Evaluation under Risk and Uncertainty
- Individual Responsibility and Equality of Opportunity
- Welfare Comparisons with Heterogeneous Prices, Consumption, and Preferences
- Welfare and the Household
- Preference Inconsistency: A Psychological Perspective
- Lifetime Well-Being
- The Well-Being of Future Generations
- Author Index
- Subject Index
Abstract and Keywords
A discrepancy between standard economic assumptions and observed behavior centers around individual preferences, which are assumed to be well ordered and consistent, but descriptively shown to be inconsistent and malleable. Not having at their disposal a reliable procedure for assigning values to options, people construct their preferences in the context of decision. As a result, the attractiveness of options depends on, among other things, the nature of other options in the set, the procedure used to express preference, the context of evaluation, and the decision-maker’s self-conception. The varieties of psychological experience underlying preference inconsistency are reviewed, and their implications are discussed. Preference inconsistency, it is proposed, is the outcome not of distracted shortcuts or avoidable errors, but of fundamental aspects of mental life that are central to how people process information. Although people endorse basic consistency criteria, their preferences are inherently inconsistent, with important implications for policy and welfare.
Eldar Shafir, Department of Psychology and Woodrow Wilson School of Public Affairs, Princeton University, Princeton, NJ
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