Public lecture held by Professor Glenn Harrison. Director, Center for the Economic Analysis of Risk (CEAR), J. Mack Robinson College of Business, Georgia State University
The popularity of randomized evaluations of behavior in development economics has, perhaps surprisingly, taken attention away from the rigorous normative policy evaluation of individual and social welfare. One reason has been the attention given to cost-effectiveness, rather than cost-benefit analysis. Another reason has been the focus on randomization of observables and the measurement of effects on observable outcomes. A final reason has been the attention lavished on average effects, rather than distributional effects. However, none of these limitations are inherent in the use of randomized evaluations. One recommendation is to only go to the field when behavior in comparable lab experiments is understood. Another recommendation is to augment with structural modeling of field experiments designed to elicit risk preferences, time preferences, and subjective beliefs.