Behavioral economics questions the basic underpinnings of economic theory, showing that people often do not act consistently in their own self-interest when making economic decisions. While these findings have important theoretical implications, they also provide a new lens for examining public policies, such as taxation, public spending, and the provision of adequate pensions. How can people be encouraged to save adequately for retirement when evidence shows that they tend to spend their money as soon as they can? Would closer monitoring of income tax returns lead to more honest taxpayers or a more distrustful, uncooperative citizenry? Behavioral Public Finance, edited by Edward McCaffery and Joel Slemrod, applies the principles of behavioral economics to government's role in constructing economic and social policies of these kinds and suggests that programs crafted with rational participants in mind may require redesign. Behavioral Public Finance looks at several facets of economic life and asks how behavioral research can increase public welfare. Deborah A. Small, George Loewenstein, and Jeff Strnad note that public support for a tax often depends not only on who bears its burdens, but also on how the tax is framed. For example, people tend to prefer corporate taxes over sales taxes, even though the cost of both is eventually extracted from the consumer. James J. Choi, David Laibson, Brigitte C. Madrian, and Andrew Metrick assess the impact of several different features of 401(k) plans on employee savings behavior. They find that when employees are automatically enrolled in a retirement savings plan, they overwhelmingly accept the status quo and continue participating, while employees without automatic enrollment typically take over a year to join the saving plan. Behavioral Public Finance also looks at taxpayer compliance. While the classic economic model suggests that the low rate of IRS audits means far fewer people should voluntarily pay their taxes than actually do, John Cullis, Philip Jones, and Alan Lewis present new research showing that many people do not underreport their incomes even when the probability of getting caught is a mere one percent. Human beings are not always rational, utility-maximizing economic agents. Behavioral economics has shown how human behavior departs from the assumptions made by generations of economists. Now, Behavioral Public Finance brings the insights of behavioral economics to analysis of policies that affect us all.

Homelessness is a haunting social problem that has, by all definitions, outgrown society's conventional solutions. Through their interviews with nine knowledgeable observers who range across the humanities, social and medical sciences, and human services, Giamo and Grunberg examines the nature and conditions of this ongoing crisis. No longer contained by traditional urban skid rows or state mental hospitals, homeless individuals now confront "normal" society face to face—and this "normal" society is at a loss for how to respond. The enormity of the problem has resulted in a stagnation of viable ideas, creating an industry with an endless litany of root cause and quick fix. But as these dialogues point out, there is no one root cause for the fact of homelessness. These timely, penetrating exhanges challenge established misconceptions of this problem.

In 1999, one in four British children lived in poverty—the third highest child poverty rate among industrialized countries. Five years later, the child poverty rate in Britain had fallen by more than half in absolute terms. How did the British government accomplish this and what can the United States learn from the British experience? Jane Waldfogel offers a sharp analysis of the New Labour government's anti-poverty agenda, its dramatic early success and eventual stalled progress. Comparing Britain's anti-poverty initiative to U.S. welfare reform, the book shows how the policies of both countries have affected child poverty, living standards, and well-being in low-income families and suggests next steps for future reforms. Britain's War on Poverty evaluates the three-pronged anti-poverty strategy employed by the British government and what these efforts accomplished. British reforms sought to promote work and make work pay, to increase financial support for families with children, and to invest in the health, early-life development, and education of children. The latter two features set the British reforms apart from the work-oriented U.S. welfare reforms, which did not specifically target income or program supports for children. Plagued by premature initiatives and what some experts called an overly ambitious agenda, the British reforms fell short of their intended goal but nevertheless significantly increased single-parent employment, raised incomes for low-income families, and improved child outcomes. Poverty has fallen, and the pattern of low-income family expenditures on child enrichment and healthy food has begun to converge with higher-income families. As Waldfogel sees it, further success in reducing child poverty in Britain will rely on understanding who is poor and who is at highest risk. More than half of poor children live in families where at least one parent is working, followed by unemployed single- and two-parent homes, respectively. Poverty rates are also notably higher for children with disabled parents, large families, and for Pakistani and Bangladeshi children. Based on these demographics, Waldfogel argues that future reforms must, among other goals, raise working-family incomes, provide more work for single parents, and better engage high-risk racial and ethnic minority groups. What can the United States learn from the British example? Britain's War on Poverty is a primer in the triumphs and pitfalls of protracted policy. Notable differences distinguish the British and U.S. models, but Waldfogel asserts that a future U.S. poverty agenda must specifically address child poverty and the income inequality that helps create it. By any measurement and despite obstacles, Britain has significantly reduced child poverty. The book's key lesson is that it can be done.