CES short course
Behavioural Public Economics
Johannes Abeler
The reading list gives a general overview of the topic – it is not required to read all
papers.
However, we will discuss two papers in more detail and I require all participants to
read those papers, marked below with **, before the course (Chetty et al. and
DellaVigna et al.).
(* denotes essential reading; ** denotes papers that need to be read before the
course)
Behavioural Welfare Economics
Introduction and General Reviews of Behavioural Economics
*Bernheim, B. and Rangel, A. (2005). Behavioral Public Economics: Welfare and Policy
Analysis with Non-Standard Decision-Makers, www.nber.org/papers/w11518
Camerer, C., Loewenstein, G. and Rabin, M. (2004). Advances in behavioral
economics, Princeton University Press.
Kahneman, D. and Tversky, A. (2000). Choices, values, and frames, Cambridge
University Press.
Rabin, M. (1998). Psychology and economics, Journal of Economic Literature pp. 11–
46.
Welfare Economics
*Bernheim, B. D., and Rangel, A. (2009). Beyond Revealed Preference: ChoiceTheoretic Foundations for Behavioral Welfare Economics. Quarterly Journal of
Economics, 124(1), 51-104.
Brunnermeier, M. Simsek, A., and Xion, W. (2014) “A welfare criterion for models with
distorted beliefs” Quarterly Journal of Economics, 129 (4) 1753-1797
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**Chetty, R.,, A. Looney, and K. Kroft. “Salience and Taxation: Theory and Evidence,”
American Economic Review 99(4): 1145-1177, 2009.
Chetty (2015) Behavioral economics and public policy: a pragmatic perspective. NBER
Working Paper 20928
Choi, J. J., Laibson, D., and Madrian, B. C. (2009). Mental Accounting in Portfolio
Choice: Evidence from a Flypaper Effect. American Economic Review, 99(5), 20852095.
Fudenberg, D., and Levine, D. K. (2006). A dual-self model of impulse control.
American Economic Review, 1449-1476.
Gul, F., and Pesendorfer, W. (2001). Temptation and self‐control. Econometrica, 69(6),
1403-1435.
Laibson, D. (1997). Golden eggs and hyperbolic discounting. Quarterly Journal of
Economics, 112(2), 443-478.
Loewenstein, G. and Thaler, R. (1989). Anomalies: intertemporal choice, Journal of
Economic Perspectives 3(4): 181–193.
Masatioglu, Y. and Raymond, C. (2014) "A Behavioral Analysis of Stochastic Reference
Dependence” http://www-personal.umich.edu/~yusufcan/KR_07_07_14_Body.pdf
Sugden, R. (2004). The opportunity criterion: consumer sovereignty without the
assumption of coherent preferences, American Economic Review 94(4): 1014–1033.
Sunstein, C. R., and Thaler, R. H. (2003). Libertarian paternalism is not an oxymoron.
University of Chicago Law Review, 70, 1159.
Thaler, R. and Sunstein, C. (2008). Nudge: Improving decisions about health, wealth,
and happiness, Yale University Press.
Tversky, A. and Kahneman, D. (1981). The framing of decisions and the psychology of
choice, Science 211(4481): 453.
Happiness
Benjamin, D., Heffetz, O., Kimball, M., and Rees-Jones, A. (2014). “Can Marginal Rates
of Substitution Be Inferred From Happiness Data? Evidence from Residency
Choices.” American Economic Review, 104(11), 3498-3528.
Benjamin, D., Heffetz, O., Kimball, M., and Szembrot, N. (2014). “Beyond Happiness
and Satisfaction: Toward Well-Being Indices Based on Stated Preference.”
American Economic Review, 104(9), 2698-2735.
Caplin, A. and Schotter, A. (2008). The foundations of positive and normative
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economics: A handbook, Oxford University Press, USA.
*Clark, A. E., Diener, E., Georgellis, Y., and Lucas, R. E. (2008). Lags And Leads in Life
Satisfaction: a Test of the Baseline Hypothesis. Economic Journal, 118(529), F222F243.
Deaton, A. (2008) Income, Health, and Well-Being around the World: Evidence from
the Gallup World Poll, Journal of Economic Perspectives, 22(2), 53-72
Dolan, P. and Kahneman, D. (2008). Interpretations Of Utility And Their Implications
For The Valuation Of Health, Economic Journal 118(525): 215–234.
*Easterlin, R. (1974). Does economic growth improve the human lot? Some empirical
evidence, in P. A. David and M. W. Reder (eds), Nations and Households in
Economic Growth: Essays in Honor of Moses Abramowitz, Academic Press, NewYork, pp. 89–125.
Easterlin, R. and Angelescu, L. (2009). Happiness and growth the world over: Time
series evidence on the happiness-income paradox, IZA Discussion Paper (4060).
Kahneman, D. and Sugden, R. (2005). Experienced utility as a standard of policy
evaluation, Environmental and Resource Economics 32(1): 161–181.
Kahneman, D., Wakker, P. and Sarin, R. (1997). Back to Bentham? Explorations of
Experienced Utility, Quarterly Journal of Economics 112(2): 375–405.
Layard, R. (2005). Happiness: Lessons From a New Science, Allen Lane, London.
Layard, R., Mayraz, G. and Nickell, S. (2008). The marginal utility of income, Journal of
Public Economics 92(8-9): 1846–1857.
Luechinger, S. (2009). Valuing Air Quality Using the Life Satisfaction Approach,
Economic Journal 119(536): 482–515.
*Stevenson, B. and Wolfers, J. (2008). Economic Growth and Subjective Well- Being:
Reassessing the Easterlin Paradox, Brookings Papers on Economic Activity .
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Charitable Giving
*Andreoni, J. 1990. “Impure Altruism and Donations to Public Goods: A Theory of
Warm Glow Giving,” Economic Journal 100, 464-477.
Andreoni, J. “An Experimental Test of the Public Goods Crowding-Out Hypothesis,”
American Economic Review 83 (5), 1317-27, 1993.
Andreoni, J (2006): “Philanthropy” in “Handbook of Giving, Reciprocity and Altruism”
edited by L.-A. Gerard-Varet, Serge-Christophe Kolm and Jean Mercier Ythier,
Elsevier
Andreoni, J., and Bernheim, B. D. (2009). Social image and the 50–50 norm: A
theoretical and experimental analysis of audience effects. Econometrica, 77(5),
1607-1636.
Andreoni, J., and Payne, A. A. (2011). Crowding-Out Charitable Contributions in
Canada: New Knowledge from the North (No. w17635). National Bureau of
Economic Research.
Andreoni J. and A. Payne, “Do Government Grants to Private Charities Crowd Out
Giving or Fundraising?” American Economic Review, 93(3), June 2003, 792-812.
Andreoni, J., Rao, J. M., and Trachtman, H. (2011). Avoiding the ask: a field experiment
on altruism, empathy, and charitable giving (No. w17648). National Bureau of
Economic Research.
Ariely, Dan, Anat Bracha, and Stephan Meier (2009) “Doing good or doing well”,
American Economic Review 99(1), 544-555
*Benabou, R., and Tirole, J. (2006). Incentives and prosocial behavior. American
Economic Review, 96(5), 1652-1678.
Bergstrom, T. and L. Blume and H. Varian, “On the Private Provision of Public Goods,”
Journal of Public Economics 29, 1986, 25-49.
**DellaVigna, S., List, J. A., and Malmendier, U. (2012). Testing for Altruism and Social
Pressure in Charitable Giving. Quarterly Journal of Economics, 127(1), 1-56.
Fehr, E., and Schmidt, K. M. (1999). A theory of fairness, competition, and
cooperation. Quarterly Journal of Economics, 114(3), 817-868.
Huck, S. and I. Rasul, “Matched fundraising: Evidence from a natural field
experiment”, Journal of Public Economics, Volume 95, Issues 5–6, 2011, 351-362
Hungerman D. “Are Church and State Substitutes? Evidence from the 1996 Welfare
Reform,” Journal of Public Economics 89 (2005), 2245-2267.
Karlan, D., and List, J. A. (2007). Does price matter in charitable giving? Evidence from
a large-scale natural field experiment. American Economic Review, 1774-1793.
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Kingma, B. “An Accurate Measurement of the Crowd-Out Effect, Income Effect, and
Price Effect for Charitable Contributions,” Journal of Political Economy 97 (1989),
1197-1207.
Potters, J., M. Sefton, and L. Vesterlund. “After You - Endogenous Sequencing in
Voluntary Contribution Games,” Journal of Public Economics, August 2005, 13991419.
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