“The Taste Approach.” Governance beyond Libertarian Paternalism

Tor Otterholt

Table of Contents


Well-being can be promoted in two ways. Firstly, by affecting the quantity, quality and allocation of bundles of consumption (the Resource Approach), and secondly, by influencing how people benefit from their goods (the Taste Approach). Whereas the former is considered an ingredient of economic analysis, the latter has conventionally not been included in that field. By identifying the gain the Taste Approach might yield, the article questions whether this asymmetry is justified. If successfully exercised, the Taste Approach might not only enable people to raise their well-being, but also provide solutions to a number of issues such as sustainable development and global justice.
The author argues that recently developed accounts such as Happiness Economics (HE) and Libertarian Paternalism (LP) both can be considered specifications of the Taste Approach. Furthermore a third specification is identified: Inexpensive Preference Formation (IPF). Whereas LP suggests that choice architecture should be exercised when rationality fails, IPF holds that governance in certain instances should improve choices also in absence of no such failure.

JEL Classification: B40, D63, I30


  • expensive tastes
  • libertarian paternalism
  • happiness and welfare economics
  • sustainable development
  • well-being
  • preference formation