POLICY MATTERS IN INVESTMENT DECISION-MAKING

THE IMPORTANCE OF POLICY DETERMINATION IN INVESTMENT DECISION-MAKING IS ILLUSTRATED. A METHODOLOGY FOR FORMULATING INVESTMENT PLANS IS DISCUSSED, USING THE APPALACHIAN DEVELOPMENT HIGHWAY SYSTEM AS AN EXAMPLE. THE DISTINGUISHING FEATURE OF SUCH A PROGRAM IS THAT MULTIPLE OBJECTIVES ARE INVOLVED, ONE CONCERNED WITH THE DISTRIBUTION OF NET BENEFITS. A BENEFIT-COST FRAMEWORK IS PROPOSED THAT SIMULTANEOUSLY TREATS MULTIPLE OBJECTIVES, AS WELL AS OTHER MATTER OF POLICY. THE FRAMEWORK IS USED TO EVALUATE ONE SEGMENT OF THE APPALACHIAN SYSTEM. IT IS SHOWN THAT THE OUTCOME DEPENDS LARGELY ON THE POLICY-MAKERS' STATEMENT OF OBJECTIVES, THE RELATIVE VALUES ASSIGNED TO CONTRIBUTIONS TO THESE OBJECTIVES GENERATED BY THE INVESTMENT, AND THE SELECTION OF A RATE OF INTEREST AND ECONOMIC LIFE OF THE PROJECT. IT IS NOT A COMPLETE ACCOUNTING OF THE BENEFITS AND COSTS, NOR DOES IT PROVIDE AN ESTIMATE OF MULTIPLIER BENEFITS. IT DOES, HOWEVER, PROVIDE AN ESTIMATE OF THE FIRST-ROUND NET BENEFITS GENERATED BY THE INVESTMENT FOR MULTIPLE OBJECTIVES. /AUTHOR/

  • Availability:
  • Supplemental Notes:
    • Vol 4, No 2, PP 241-253
  • Authors:
    • Mcbride, G A
  • Publication Date: 1970-8

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  • Accession Number: 00201022
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Apr 1 1971 12:00AM