Feldstein (1997) reviews his and others' contributions in the distortionary costs of taxation, arriving at a remarkable estimate that the cost per incremental dollar of government spending is a very high $2.65. Kaplow (1996) argues that it is optimal to supply a public good whenever the...

Discussing fundamental issues on the ethical foundation of public economic policy, this paper arrives at conclusions that will surprise most economists. While reviewing relevant contributions, it argues for happiness as the ultimate objective, in contrast to economists' preference for...

Discussing fundamental issues on the ethical foundation of public economic policy, this paper arrives at conclusions that will surprise most economists. While reviewing relevant contributions, it argues for happiness as the ultimate objective, in contrast to economists' preference for...

Harsanyi (1997) argues that, for normative issues, informed preferences should be used, instead of actual preferences or happiness (or welfare). Following his argument allowing him to move from actual to informed preferences to its logical conclusion forces us to use happiness instead. Where...

Harsanyi (1997) argues that, for normative issues, informed preferences should be used, instead of actual preferences or happiness (or welfare). Following his argument allowing him to move from actual to informed preferences to its logical conclusion forces us to use happiness instead. Where...

Despite economists' preference for the more objective concepts like preference, more emphasis should be given to the more subjective concepts like happiness, as happiness is our ultimate objective and as more money does not buy more happiness much, despite the rat race for material growth due to...

Welfare economics is incomplete as it analyzes preferences without going on to analyze welfare (or happiness) which is the ultimate objective. Preference and welfare may differ due to imperfect knowledge, imperfect rationality, and/or a concern for the welfare of others (non-affective altruism)....

Welfare (or happiness) may differ from utility (representing preference) due to imperfect information and imperfect rationality. This is supported by studies on happiness and individual choice. Our accumulation instinct and advertising may cause a materialistic bias, making individuals placing...

In many countries, the GDP share of the public sector increases with per capita income but happiness fails to register a long-term upward trend. Most objective indicators of the quality of life also do not correlate positively with income but improve with time associated with the advancement of...

We develop two models in this paper to investigate the social welfare implication of the number and size of interest groups. The first model analyzes the case in which individuals in each group ignore the effect of the lobbying effect on the size of the aggregate output of the economy. It is...