Working Paper: NBER ID: w7316
Authors: Stephen Coate
Abstract: This paper describes an efficiency approach to the evaluation of policy changes. Rather than comparing the utility allocations that arise before and after a policy change is introduced, this approach evaluates a policy change by comparing it with other possible changes which might be made from the status quo. The main merit of the approach is that it is founded on the Pareto criterion rather than on a distributional value judgement. The paper provides a precise statement of the approach and applies it to a number of examples. Some objections to the approach are also anticipated and discussed.
Keywords: No keywords provided
JEL Codes: D61; D63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| efficiency of a policy change (D78) | existence of alternative policies that could provide better outcomes (D78) |
| efficiency of a policy change (D78) | desirability of the distributional changes it induces (D39) |
| not efficient policy change (H21) | socially undesirable (P37) |