Part one in a three-part series on how the tools of welfare analysis and decision science can be used to inform the direction, scope, and design of research and decision-making.
Suppose a policymaker is considering strategies to reduce poverty. For the sake of simplicity, let's assume the policymaker is weighing the tradeoffs of creating or expanding an in-kind benefit transfer, such as a job training program. Implementing the program has a measurable impact on welfare-relevant outcomes (e.g., education, lifetime earnings, health, etc.). However, the program also imposes costs on society. These costs reflect both the budgetary cost (i.e., the total sum of program expenditures), as well as other changes in behavior, expenditures, or tax revenues that either bolster or drag on social welfare.
How should the policymaker weigh the evidence for or against implementing the policy? Is it worth implementing now, not implementing at all, or conducting additional evaluation to accrue more evidence on impact? This series of blog posts draws in methods from diverse fields to provide a formal structure for answering these questions.