BENEFIT-COST ANALYSIS: ITS RELEVANCE TO PUBLIC INVESTMENT DECISIONS: COMMENT AND REPLY

THIS COMMENT AND REPLY ARE BASED ON AN EARLIER PAPER IN WHICH THE AUTHOR CRITICIZED THE EXISTING PRACTICE OF BENEFIT-COST ANALYSIS WHICH ACCOUNTS FOR NATIONAL INCOME BENEFITS AND COSTS, BUT NOT FOR BENEFITS AND COSTS OF OTHER OBJECTIVES, SUCH AS REDISTRIBUTION OF NATIONAL INCOME TO ECONOMICALLY DEPRESSED REGIONS. HE PROPOSED STATUTORY ADOPTION OF CRITERIA FOR DESIGN AND EVALUATION OF PROJECTS WHICH WOULD COMBINE NATIONAL INCOME (EFFICIENCY) AND ONE OR MORE OTHER OBJECTIVES. IN THE COMMENT, IT IS ARGUED THAT IN SOME CASES REDISTRIBUTIONAL EFFECTS HAD BEEN ANALYZED IN SEVERAL STUDIES (IN WHICH IT WAS FOUND THAT THE NET REDISTRIBUTION WAS NOT IN THE 'RIGHT' DIRECTION), THAT COST- EFFECTIVENESS AND COST-BENEFIT ANALYSES WERE CONFUSED, AND THAT THE LEGISLATIVE PROPOSAL IS IMPRACTICAL BECAUSE OF THE NATURE OF CONGRESS. THE REPLY ARGUES THAT CONSIDERATION OF OF DISTRIBUTION EFFECTS IN THE PLANNING OF PROJECTS (RATHER THAN SIMPLY CALCULATING THE DISTRIBUTIONAL CONSEQUENCES OF PROJECTS THAT HAVE BEEN PLANNED FOR NATIONAL INCOME GAINS ALONE) WOULD LIKELY RESULT IN CHANGES IN BOTH THE PHYSICAL CHARACTERISTICS AND THE BENEFITS AND COSTS OF THE PROJECTS THEMSELVES, AND THAT THE APPARENT FAILURES OF CONGRESS WERE IN FACT DUE TO THE FAILURES OF EXECUTIVE DEPARTMENTS AND THE PRESIDENT. THE SPECIFIC EXAMPLES CITED CONCERN WATER RESOURCES. /BPR/

  • Availability:
  • Supplemental Notes:
    • Vol 81, pp 695-699, PP 700-702
  • Corporate Authors:

    N/A

    ,   United States 
  • Authors:
    • Haveman, R H
    • Maass, A
  • Publication Date: 1967

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 00201783
  • Record Type: Publication
  • Source Agency: Traffic Systems Reviews & Abstracts
  • Files: TRIS
  • Created Date: May 25 2003 12:00AM