Empirical Welfare Economics

Date: April 13, 2023
Time: 4:00 pm
Room: DBH 4011
Speaker: Federico Echenique 
(UC Berkeley)
Welfare economics relies on access to agents’ utility functions: we revisit classical questions in welfare economics, assuming access to data on agents’ past choices instead of their utilities. Our main result considers the existence of utilities that render a given allocation Pareto optimal. We show that a candidate allocation is efficient for some utilities consistent with the choice data if and only if it is efficient for an incomplete relation derived from the revealed preference relations and convexity. Similar ideas are used to make counterfactual choices for a single consumer, policy comparisons by the Kaldor criterion, and determining which allocations, and which prices, may be part of a Walrasian equilibrium.
Federico Echenique is a Professor of Economics at the University of California at Berkeley. He has published articles in the American Economic Review, Econometrica, Journal of Political Economy, Quarterly Journal of Economics, Journal of Economic Theory, and Theoretical Economics. He is a fellow of the Econometric Society, and co-editor of Theoretical Economics. Echenique was Program Co-chair of EC 2021.
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