- 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
This chapter reviews recent contributions in positive and normative economics concerned with how individuals plan, over their uncertain lifetime, their consumption and health-affecting activities, and with the design of the optimal public policy in that context. The chapter first emphasizes that contemporary theories aimed at explaining how individuals plan their lives rely on unequal forms and degrees of rationality. On the normative side, it argues that there exists a tension between, on the one hand, optimal policies derived from a utilitarian social welfare function, and, on the other hand, optimal policies derived from an ex post egalitarian social welfare function. Actually, optimal policies under utilitarianism—encouraging savings, annuitization, and prevention—increase expected lifetime well-being, but at the cost of reducing the realized lifetime well-being of the unlucky short-lived, which raises inequalities in realized lifetime well-being.
Associate Professor, Paris School of Economics
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