A welfare theoretical framework to guide policy evaluation

We provide a welfare-theoretic framework for synthesizing the evidence on the impact of policy evaluations and providing ‚fair‘ comparisons between policy instruments. We show how to integrate different outcome variables of interest, such as costs of a policy, effectiveness, co-benefits and distributional effects in reduced-complexity metrics. We illustrate the concept for an ex-ante evaluation of different food tax policies in the EU to assess welfare effects, multidimensional environmental effects as well as inequality effects. We conclude with implications for future research design and data requirements.