The Case of Stated Preferences and Social Well-Being Indices

Abstract

This paper provides a real-world test case for how to approach contemporary preference aggregation procedures. We examine the method of using stated preferences (SP) to structure social well-being indices. The method has seen increasing popularity and interest, both in economists’ laboratory research and by governments and international institutions. SP offers a sophisticated aggregation of peoples’ preferences regarding social well-being aspects and, in this way, provides elegant and non-paternalistic techniques for deciding how to weigh and prioritize various potential aspects of social well-being (health, happiness, economic growth, etc.). However, this method also poses difficulties and limitations from broader political and philosophical perspectives. This paper comprehensively charts these difficulties and suggests that SP methods should be complemented with appropriate deliberation procedures. The paper bridges the distinct perspectives of economists and political theorists in order to make SP an attractive instrument in determining policy.