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Weighing the costs and benefits of public policy: on the dangers of single metric accounting

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  • Thoma, Johanna

Abstract

This article presents two related challenges to the idea that, to ensure policy evaluation is comprehensive, all costs and benefits should be aggregated into a single, equity-weighted wellbeing metric. The first is to point out how, even allowing for equity-weighting, the use of a single metric limits the extent to which we can take distributional concerns into account. The second challenge starts from the observation that in this and many other ways, aggregating diverse effects into a single metric of evaluation necessarily involves settling many moral questions that reasonable people disagree about. This raises serious questions as to what role such a method of policy evaluation can and should play in informing policy-making in liberal democracies. Ultimately, to ensure comprehensiveness of policy evaluation in a wider sense, namely, that all the diverse effects that reasonable people might think matter are kept score of, we need multiple metrics as inputs to public deliberation.

Suggested Citation

  • Thoma, Johanna, 2021. "Weighing the costs and benefits of public policy: on the dangers of single metric accounting," LSE Research Online Documents on Economics 112689, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:112689
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    File URL: http://eprints.lse.ac.uk/112689/
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    References listed on IDEAS

    as
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    4. Maddalena Ferranna & JP Sevilla & David E. Bloom, 2021. "Addressing the COVID-19 Pandemic: Comparing Alternative Value Frameworks," NBER Working Papers 28601, National Bureau of Economic Research, Inc.
    5. Jan-Emmanuel de Neve & Andrew E. Clark & Christian Krekel & Richard Layard & Gus O’donnell, 2020. "Taking a wellbeing years approach to policy choice," PSE-Ecole d'économie de Paris (Postprint) halshs-02973078, HAL.
    6. Voorhoeve, Alex, 2018. "Balancing small against large burdens," Behavioural Public Policy, Cambridge University Press, vol. 2(1), pages 125-142, May.
    7. Bloom, David & Ferranna, Maddalena & Sevilla, JP, 2021. "Addressing the COVID-19 Pandemic: Comparing Alternative Value Frameworks," CEPR Discussion Papers 15904, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    wellbeing; equality; values in science; reasonable disagreement; cost-benefit analysis; risk; Covid-19;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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