From preference to happiness: Towards a more complete welfare economics

Welfare economics is incomplete as it analyzes preference 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). Imperfection in knowledge and rationality has a biological basis and the resulting accumulation instinct amplifies with advertising-fostered consumerism to result in a systematic materialistic bias, as supported by recent evidence on happiness and quality of life. Such a bias, in combination with relative-income effects, environmental disruption effects, and over-estimation of the excess burden of taxation, results in the over-spending on private consumption and under-provision of public goods, and may make economic growth welfare-reducing. A cost-benefit analysis aiming even just at preference maximization should offset the excess burden of financing for public projects by the indirect effect through the relative-income effect and by the environmental disruption effect. A cost-benefit analysis aiming at welfare maximization should, in addition, adjust the marginal consumption benefits of public projects upward by a proportion determined by the proportionate excess of marginal utility over marginal welfare of consumption. The environmental disruption effects have also to be similarly adjusted upward. However, the productive contributions of public projects should not be so adjusted.  Welfare economics has achieved much, though still with long-standing weaknesses (e.g., the inability to make non-Pareto comparisons due to the unwillingness or difficulties in making interpersonal comparisons of cardinal utilities). It is not the intention of this paper either to survey the achievements or to remedy the weaknesses. Rather, it is argued that welfare economics is too narrow in focus and should be expanded in a number of aspects to make the analysis more complete and hence more useful. Some of the aspects discussed below have long been known but largely ignored in welfare economic analysis. Some are less well known and controversial points which are nevertheless important for welfare. Received: 22 January 2001/Accepted: 3 April 2002 This paper is revised from the keynote paper of the same title at the Conference on `Economics and the Pursuit of Happiness', Nuffield College, Oxford 2000, and combined with the paper `Towards a welfarist cost-benefit analysis' presented at American Economic Association Meeting, New Orleans, 2001. The paper was revised during my visit to the Division of Applied Economics, Nanyang University, Singapore. I am also grateful to Maurice Salles and two anonymous referees of this journal for helpful comments.     

Predictors of strike voting behavior: The case of university faculty

This study examines the impact of demographic characteristics, job variables, and attitudinal factors on the strike voting behavior of faculty members at a Canadian university. The results show that married faculty members and those from single-income households were more inclined to vote against the strike. Regarding the attitudinal factors, faculty members who were satisfied with existing research facilities and were loyal to the Faculty Association were likely to favor the strike, whereas faculty who were satisfied with working conditions and with the university administration were opposed to the strike. Beliefs about unions, however, did not appear to have an influence on voting behavior. The author thanks J. Dart, A. Dastmalchian, R. Long, D. Maki, and two anonymous referees for their helpful comments.     

Utilitarianism and interpersonal comparison

Beliefs in the impossibility of interpersonal comparison of welfare and the unacceptability of utilitarianism are based on a non-materialist solution to the theory of mind, i.e. on the existence of a soul. The compellingness of the theory of evolution and some discoveries in brain sciences render (philosophical) materialism very persuasive. The acceptance of materialism implies the negation of free will, non-significance of the self (no substantial reason to care much more about the welfare of one's own future self than the welfare of others), possibility of interpersonal comparison of welfare, compellingness of utilitarianism, and the possibility of conscious machines. Searle's argument on the impossibility of rigorous social sciences is however rejected.I am grateful to Dennis Mueller and Aubrey Townsend for commenting on the first draft.     

ANALYSIS OF VECTOR AUTOREGRESSIONS IN THE PRESENCE OF SHIFTS IN MEAN

This paper considers the implications of mean shifts in a multivariate setting. It is shown that under the additive outlier type mean shift specification, the intercept in each equation of the vector autoregression (VAR) will be subject to multiple shifts when the break dates of the mean shifts to the univariate series do not coincide. Conversely, under the innovative outlier type mean shift specification, both the univariate and the multivariate time series are subject to multiple shifts when mean shifts to the innovation processes occur at different dates. We consider two procedures, the first removes the shifts series by series before forming the VAR, and the second removes intercept shifts in the VAR directly. The pros and cons of both methods are discussed.     

Role of Parent and Peer Relationships and Individual Characteristics in Middle School Children's Behavioral Outcomes in the Face of Community Violence

This study examines processes linking inner‐city community violence exposure to subsequent internalizing and externalizing problems. Hypothesized risk and protective factors from 3 ecological domains—children's parent and peer relationships and individual characteristics—were examined for mediating, moderating, or independent roles in predicting problem behavior among 667 children over 3 years of middle school. Mediation was not found. However, parent and peer variables moderated the association between exposure and internalizing problems. Under high exposure, normally protective factors (e.g., attachment to parents) were less effective in mitigating exposure's effects than under low exposure; attachment to friends was more effective. Individual competence was independently associated with decreased internalizing problems. Variables from all domains, and exposure, were independently associated with externalizing problems. Protective factors (e.g., parent attachment) predicted decreased problems; risk factors (e.g., friends' delinquency) predicted increased problems. Results indicate community violence reduction as essential in averting inner‐city adolescents' poor behavioral outcomes.     

Subjective Residential Environment and its Implications for Quality of Life Among University Students in Hong Kong

This paper reports the results of a convenient sample survey of 500 Hong Kong university students conducted in May 2003. The main aim of the survey was to investigate the respondents perception of the residential environment and its implications for the quality of life (QOL). Results indicated that the respondents were generally satisfied with the residential environment, scoring a mean satisfaction rating of 3.32, on a 5-point Likert scale. The type, size and age of a respondents home, years of occupancy and attending university were found to be significantly related to the overall satisfaction. Transport (4.37), environmental quality (4.30), and public utilities (4.25) were reported to be the most important infrastructures for the QOL, but environmental quality (3.21), education (3.11) and greening (2.98) were considered to be the least satisfactory ones. The desirable distribution of facilities and services was defined by their functions and the new urban designs were appreciated by the respondents. Although available space was less than the ideal and public transport was a serious concern, the respondents had adapted well to the high-density environment and enjoyed the urban life in Hong Kong. It is hoped that the results and findings of this study can provide a reference for the formulation of future development strategy in Hong Kong.     

Quality of Life Perceptions and Directions for Urban Regeneration in Hong Kong

Urban regeneration can be an effective tool to promote sustainability and enhance macro-level quality of life if the principles of encouraging participation, building community character, advancing equity, improving environment and enlivening the economy are observed. Through the assessment of various quality of life indicators related to these five basic principles for sustainable urban regeneration by the public, private and community sectors, this paper finds that Hong Kong falls far short of realizing these fundamental principles. There are also considerable discrepancies between the public and non-public (private and NGOs) sectors in terms of evaluating existing quality of life issues and perceiving their relative priorities. The private and community sectors tend to have lower rating of existing situation and consequently a longer priority list. On the contrary, the public sector seems to be more complacent with the existing quality of life situations and has a much shorter priority list. The public sectors more relaxed attitude coupled with a top-down executive-led polity mean that Hong Kong will probably have a long way to go toward sustainable urban regeneration.     

Statistical analysis of competing risks model from Marshall–Olkin extended Chen distribution under adaptive progressively interval censoring with random removals

In this paper, a new censoring scheme named by adaptive progressively interval censoring scheme is introduced. The competing risks data come from Marshall–Olkin extended Chen distribution under the new censoring scheme with random removals. We obtain the maximum likelihood estimators of the unknown parameters and the reliability function by using the EM algorithm based on the failure data. In addition, the bootstrap percentile confidence intervals and bootstrap-t confidence intervals of the unknown parameters are obtained. To test the equality of the competing risks model, the likelihood ratio tests are performed. Then, Monte Carlo simulation is conducted to evaluate the performance of the estimators under different sample sizes and removal schemes. Finally, a real data set is analyzed for illustration purpose.     

Pooling Data Across Transparently Different Groups of Key Informants: Measurement Equivalence and Survey Research*

Survey research is often deployed in the study of situational issues facing organizations and functions within organizations. One particular survey research approach can be described as follows: (1) survey questionnaires involving perceptual questions about a situational issue are administered to key informants, one key informant per unit of analysis; (2) key informants vary in a transparent manner across units of analysis such that groups of these key informants are discernible; and (3) perceptual responses, after data collection, are then pooled to create a single larger data set for subsequent statistical manipulations. In this methodological note, we draw attention to this particular survey research approach and ask the question: When is it appropriate to pool data provided by key informants with transparently different demographics across units of analysis so as to create a single larger data set for statistical manipulations? We use a simple example and data from a published study to motivate the relevance and gravity of this methodological question. Offering the concept and empirical assessment of measurement equivalence as the answer to this methodological question of data pooling, we prescribe and demonstrate, with the total quality management→customer satisfaction relationship, the procedural steps for evaluating the seven subdimensions of measurement equivalence. In conclusion, we highlight methods that should be adopted, before data collection, to minimize the risk of violating measurement equivalence. After data collection and for the instances when the empirical assessment for measurement equivalence advises against pooling of such data, we also offer suggestions for analyzing such data and presenting associated statistical results.     

The gamma generalized linear model,log transformation,and the robust Yuen-Welch test for analyzing group means with skewed and heteroscedastic data

ABSTRACT

Alternatives for positively skewed and heteroscedastic data include the Yuen-Welch (YW) test, data transformations, and the generalized linear model (GzLM). Because the GzLM is rarely considered in psychology compared to the other two, we compared these strategies conceptually and empirically. The YW test generally has satisfactory power, but its trimmed mean can deviate substantially from the arithmetic mean, which is often the desired parameter. The gamma GzLM can be used as a substitute for the log transformation and addresses the limitations in inference for the YW and data transformations.