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Incorporating Social Welfare in Program-Evaluation and Treatment Choice

Accepted version
Peer-reviewed

Type

Article

Change log

Authors

Bhattacharya, Debopam  ORCID logo  https://orcid.org/0000-0002-2870-7898
Komarova, Tatiana 

Abstract

jats:titleAbstract</jats:title> jats:pWe introduce a notion of money-metric social welfare for discrete choice, under unrestricted heterogeneity and income-effects. It is the maximized indirect utility under normalization of the outside option. It also equals the amount of income necessary to achieve a given level of utility, while certain choices are prohibited. We show that the distribution of this quantity is non-parametrically identified as a closed-form functional of average structural demand for the outside option, making it useful for cost-benefit analysis and optimal targeting. An illustration with private tuition subsidies in India shows that the income-path of usage-maximizing subsidies differs significantly from welfare-maximizing ones.</jats:p>

Description

Keywords

35 Commerce, Management, Tourism and Services, 3509 Transportation, Logistics and Supply Chains, 38 Economics, 3801 Applied Economics, Behavioral and Social Science, Clinical Research, Health Services

Journal Title

Review of Economics and Statistics

Conference Name

Journal ISSN

0034-6535
1530-9142

Volume Title

Publisher

MIT Press
Sponsorship
ESRC (ES/W010461/1)