Social Choice with Partial Knowledge of Treatment Response

Charles Manski, Northwestern University

Economists have long sought to learn the effect of a "treatment" on some outcome of interest, just as doctors do with their patients. A central practical objective of research on treatment response is to provide decision makers with information useful in choosing treatments. Often the decision maker is a social planner who must choose treatments for a heterogeneous population--for example, a physician choosing medical treatments for diverse patients or a judge choosing sentences for convicted offenders. But research on treatment response rarely provides all the information that planners would like to have. How then should planners use the available evidence to choose treatments?  Charles Manski will address key aspects of this broad question, exploring and partially resolving pervasive problems of identification and statistical inference that arise when studying treatment response and making treatment choices

Source Material: C. Manski, Social Choice with Partial Knowledge of Treatment Response , Princeton University Press, 2005.

How should we use evidence in policy evaluation and simulation?
Richard Blundell, Institute for Fiscal Studies and University College London

In this presentation I will consider the tension between pure ex-post evidence based evaluation and the need for ex-ante simulation of policy proposals. I will use the debate about the impact and design of the Working Families Tax Credit policy reform in the UK as a leading illustration. The policy issue addressed by WFTC was the low labour market attachment and high incidence of poverty among certain key demographic groups during the early 1990s. The presentation will examine how best to use evidence to evaluate the impact and assess the design of earned income tax policies like the WFTC. These policies have taken a central position in labour market policy debate in the EU and in North America . In the accompanying paper I review the general discussion of the impact and optimal design of such policies.

A background paper is available here

Discussion

Paul Johnson, HM Treasury’s chief micro-economist, will open the discussion