Non-Market Values and Policy Analysis

Many of the things that are most valuable in life are not things that can be traded on the market. Love, friendship, the respect of your peers, and a sense of belonging are all incredibly important parts of life, and they’re also impossible to incorporate into economic analysis. Now, since they’re not economic goods, it normally wouldn’t be a problem that they aren’t subject to economic analysis. Unfortunately, economists have not been content to restrict themselves to economic goods, but instead attempt to provide analysis of public policy choices using economic methods.

Market Norms are Crowding out Social Norms

Imagine you are going over to a friend’s house for a nice dinner. You want to show appreciation for the lovely meal they’ve prepared for you, and you have a few options. You can offer to have them over for dinner in the future. You can bring a bottle of wine or a six pack of beer. You can simply say thank you and tell them what a lovely evening you have had.