Introduction

The problem of interpersonal comparisons of utility or welfare can be studied from several perspectives. First, there is a conceptual issue: Are such comparisons at all meaningful? Second, there is a question of operationalization. Assuming that the notion of comparing the utility or welfare of different people is meaningful, can it be reliably and validly implemented in practice? Here, “in practice” can mean anything from procedures that would work only under ideal conditions to methods that could be routinely used under a wide variety of circumstances. Third, we can start from the fact that people carry out these comparisons all the time, and ask how they do it. This question, or rather a subvariety of it, is the main topic of this chapter.

This issue – how people actually make interpersonal comparisons – can be studied in many ways. Coming from experimental psychology, one may search for heuristics, biases, and inconsistencies. Experimental techniques also allow us to test perceptions of relative need, and to bring out the features of an allocative situation and of potential recipients that shape this perception. The focus of this chapter is on the allocative behavior of institutions. In allocating the scarce goods at their disposal – organs for transplantation, exemption from military service, or admission to higher education – institutions often (but not invariably) make comparisons between potential recipients. These comparisons are sometimes made in terms of utility or welfare, more frequently in terms of proxies for well-being.