Publications
Publications
- 2012
- Annual Review of Economics
A Reduced-Form Approach to Behavioral Public Finance
By: Sendhil Mullainathan, Joshua Schwartzstein and William Congdon
Abstract
Research in behavioral public finance has blossomed in recent years, producing diverse empirical and theoretical insights. This article develops a single framework with which to understand these advances. Rather than drawing out the consequences of specific psychological assumptions, the framework takes a reduced-form approach to behavioral modeling. It emphasizes the difference between decision and experienced utility that underlies most behavioral models. We use this framework to examine the behavioral
implications for canonical public finance problems involving the provision of social insurance, commodity taxation, and correcting externalities. We show how deeper principles undergird much work in this area and that many insights are not specific to a single psychological assumption.
Keywords
Citation
Mullainathan, Sendhil, Joshua Schwartzstein, and William Congdon. "A Reduced-Form Approach to Behavioral Public Finance." Annual Review of Economics 4 (2012): 511–540.