Expert Insights Series #2: Behavioral Economics and Public Policy with Dr. John Ifcher

Peddie Psychology & Sociology Club | Special Feature reported by Ophelia Ni, March 2025

Economics is often seen as a numbers-driven discipline, but for Dr. John Ifcher, it’s just as much about understanding human behavior. A professor at Santa Clara University, Dr. Ifcher's research bridges economics and psychology, focusing on decision-making, happiness, and social preferences. With experience in both public policy and academia, his work provides key insights into how economic theories play out in real-world applications. Below, he shares his thoughts on navigating academia, behavioral economics, and the broader implications of economic decision-making.

Finding the Right Path in Economics

Q: At what moment in your academic journey did you realize economics was the right field for you?

Dr. Ifcher: Among my colleagues, there are generally two paths to becoming an economist. Some know from a young age that they want to major in economics, minor in math, and head straight to graduate school. That wasn’t my path. I never took an economics class as an undergraduate—I majored in Computer Science and Psychology. Economics wasn’t on my radar until I pursued a Master’s in Administration at Columbia’s School of International and Public Affairs, where I took my first economics course. It just made sense to me as a way of thinking.

After that, I worked for the city of New York for five years, first as a city manager and then as a senior advisor to the Commissioner, primarily dealing with welfare reform related to the Parks Department. I assumed I would study public programs in my Ph.D., which I initially did, but once I completed it, my interests shifted toward behavioral and happiness research. It was in my late 20s, as I pursued my Ph.D., that I realized I truly wanted to be a professor.

Connections Between Public Policy and Academic Research

Q: You’ve worked in both public policy and academia, from advising New York City's Parks Department to researching subjective well-being. How has your time in public service shaped the way you approach research?

Dr. Ifcher: When I entered my Ph.D. program, I thought I would focus on studying programs similar to the ones I had worked on in public service. My dissertation was on welfare reform programs, and I did publish a paper on that. However, after completing my Ph.D., I realized I was more interested in behavioral and happiness research rather than strict public economics or finance.

My public service experience has certainly shaped how I approach research, though. In government, policies are designed with real-world constraints, often balancing political feasibility with economic rationale. That practical experience has helped me appreciate the difference between economic theory and what actually happens when policies are implemented.

Decision-Making for Others vs. Ourselves

Q: Your research suggests people act differently when making decisions for others. Has your role as Department Chair changed how you personally make decisions?

Dr. Ifcher: Microeconomics, at its core, is the study of how decision-making entities—individuals, households, firms, and governments—make choices under constraints. Traditionally, economic models assume people act to maximize their own objectives.

However, my research suggests decision-making changes when acting on behalf of others. Decision-makers often weigh factors differently, sometimes being more cautious or, conversely, more generous when making choices for others. As Department Chair, I assign faculty to classes and make other administrative decisions, but we don’t yet have a well-defined model for understanding these types of decisions. There’s still a lot to explore in this area.

Fairness, Income Inequality, and Public Policy

Q: Your research on social preferences and inequity aversion suggests people prefer fairness over pure economic rationality. What’s one insight policymakers should take from this?

Dr. Ifcher: People don’t just care about their own income—they care about how it compares to others. There are several ways individuals process inequality:

• Relative Income Concerns: People feel worse when others have more than them.

• Efficiency Concerns: Some people prioritize maximizing total wealth regardless of distribution.

• Inequity Aversion: People prefer when everyone has the same resources, and deviations from that—whether they have more or less—reduce well-being.

• Pure Self-Interest: Some people are unaffected by others’ incomes and focus solely on their own wealth.

Empirical research suggests that redistribution can improve overall well-being, but there are trade-offs. Taxation to fund social safety nets must be balanced against individuals' aversion to losing income. Policymakers should acknowledge these behavioral responses when crafting economic policies.

The Principle-Implementation Gap in Policy

Q: Your research suggests people often support government intervention in theory but resist it in practice. What drives this contradiction, and how can policymakers address it?

Dr. Ifcher: COVID-19 was a clear example of this. While many people supported temporary government programs like stimulus checks or expanded unemployment benefits, public sentiment changed once the immediate crisis passed. Some felt the government overreached, while others felt these programs were necessary.

Policymakers need to anticipate these shifts and recognize that attitudes toward government intervention often change depending on immediate circumstances. Designing policies that remain effective beyond temporary crises is a challenge but a necessary one.

Rethinking Economic Policy for Well-Being

Q: Your research suggests that happiness is influenced more by relative wealth than absolute wealth. Should policies focus on redistribution rather than just growth?

Dr. Ifcher: Just because research suggests redistribution improves well-being doesn’t mean it will be implemented. Political realities often outweigh empirical evidence. In the U.S., the trend has been toward reducing the social safety net and lowering taxes, even though research suggests that stronger safety nets lead to greater happiness.

There’s also substantial evidence that countries with more generous social policies report higher life satisfaction. That said, economic policy is rarely guided solely by well-being metrics. Political constraints often limit how much redistribution is feasible.

Advice for Students Interested in Behavioral Economics

Q: What books or resources would you recommend for high school students curious about behavioral economics and public policy?

Dr. Ifcher: Thinking, Fast and Slow by Daniel Kahneman is a must-read for understanding decision-making psychology. The Undoing Project by Michael Lewis tells the story of how behavioral economics developed, making it an engaging read. Nudge by Richard Thaler and Cass Sunstein is essential for understanding how small interventions influence behavior.

The Future of Behavioral Economics

Q: What big, unanswered questions in behavioral economics excite you the most? If you were a high school student today, what topics would you want to explore?

Dr. Ifcher: One of the most important questions is how self-interested people are, and whether that can change. Many of today’s biggest problems—climate change, nuclear risk, AI safety—are collective action problems.

Individual actions don’t make a meaningful impact, but collective action does. How do we encourage people to prioritize long-term, collective well-being over short-term, individual self-interest? That’s a major challenge that behavioral economics can help address.

Final Thoughts from Dr. Ifcher

"Behavioral economics gives us a framework for understanding why people make the choices they do. If you’re interested in economics, psychology, or public policy, there’s so much room to explore. Ask big questions, challenge assumptions, and pursue research that can have a real-world impact."

Dr. Ifcher’s insights demonstrate the power of economics in shaping public policy and human behavior. From decision-making research to social preferences, behavioral economics continues to provide essential tools for understanding our world.

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