The Resource Applied Welfare Economics : Cost-Benefit Analysis of Projects and Policies

Applied Welfare Economics : Cost-Benefit Analysis of Projects and Policies

Applied Welfare Economics : Cost-Benefit Analysis of Projects and Policies
Applied Welfare Economics
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Cost-Benefit Analysis of Projects and Policies
  • Commission and other international and national institutions
  • What is the effect of a new infrastructure on the well-being of a local community? Is a tax reform desirable? Does the privatization of a telecommunication provider increase social welfare? To answer these questions governments and their policy advisors should have in mind an operative definition of social welfare, and cannot rely on simple official statistics, such as GDP. The price we observe are often misleading as welfare signals, and costs and benefits for the society should be based on 'shadow prices', revealing the social opportunity costs of goods and of changes of the world. This book explains how to apply these welfare economics ideas to the real world. After a theoretical discussion of the concept of social welfare, a critical analysis of the traditional doctrine of welfare economics embodied in the Two Fundamental Theorems, and a presentation of social cost-benefit analysis, the book introduce the readers to an applied framework. This includes the empirical estimation of shadow prices of goods, of the social cost of labour and capital, the assessment of risk. This book also includes the state of the art of international experience with CBA, including ex-post evaluation of major projects, economic rates of return in different sectors, and a case study on privatisation, is presented. This book offers a unique and original blend of theory, empirics and experience. The theoretical discussion clarifies why shadow prices are not virtual market equilibrium prices, as they arise as the solution of a planning problem, often with governments and economic agents constrained in their information and powers. The empirical chapters show how to compute proxies of the shadow prices in simple ways. The experience chapters draw from first hand research, gained by the Author and his collaborators over many years of advisory work for the European
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no index present
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HB846 -- F579 2014eb
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non fiction
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Routledge Advanced Texts in Economics and Finance
Applied Welfare Economics : Cost-Benefit Analysis of Projects and Policies
7.2 Deriving welfare weights
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online resource
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  • Cover -- Half Title -- Title Page -- Copyright Page -- Table of Contents -- List of figures -- List of tables -- List of boxes -- Preface -- Acknowledgements -- Abbreviations -- Main notation -- Part I Theory -- 1 On social welfare -- Overview -- 1.1 The concept of social welfare -- 1.2 The welfare assumptions behind GDP and NNP -- 1.3 Individual and social welfare -- 1.4 Determinants of individual welfare: goods -- 1.5 Determinants of social welfare: individual utilities -- 1.6 Sen's critique of individualistic SWF -- 1.7 Paternalism and not (only) individualistic Social Welfare Functions
  • 1.8 Happiness economics -- 1.9 'Positive' analysis -- 1.10 Further reading -- 1.11 Summary of Chapter 1 -- 2 The two fundamental theorems re-examined -- Overview -- 2.1 Theorems versus intuitions -- 2.2 The Arrow-Debreu economy -- 2.3 The axiomatic structure -- 2.4 Consumers, producers and government: objectives and constraints -- 2.5 The Walrasian equilibrium -- 2.6 The two theorems without ideology -- 2.7 The informative structure: Stiglitz's critique -- 2.8 Critical analysis of the second theorem -- 2.9 The government rediscovered in second-best economies -- 2.10 Further reading
  • 2.11 Summary of Chapter 2 -- Appendix 2.1: Policies based on the Second Theorem: -- 3 Shadow prices and the social planner -- Overview -- 3.1 Introductory remarks -- 3.2 A model for project and policy evaluation -- 3.3 A second-best economy in the DS frame -- 3.4 Policy reforms and shadow prices -- 3.5 Multi-government setting -- 3.6 Why use shadow prices? -- 3.7 Further reading -- 3.8 Summary of Chapter 3 -- Appendix 3.1: Some results from Drèze and Stern (1987) -- Part II Empirics -- 4 The social cost of goods -- Overview -- 4.1 Observed prices and financial analysis
  • 4.2 Accounting prices and economic analysis -- 4.3 Empirical approaches for guessing accounting prices -- 4.4 The border price rule for tradable goods -- 4.5 The Standard Conversion Factor -- 4.6 The long-run marginal cost -- 4.7 Willingness-to-pay -- 4.8 Further reading -- 4.9 Summary of Chapter 4 -- Appendix 4.1: Financial analysis -- Appendix 4.2: An example of financial and economic analysis -- 5 The social cost of labour -- Overview -- 5.1 Earlier literature on the social opportunity cost of labour -- 5.2 A conceptual model for the social cost of labour
  • 5.3 The shadow wage rate and labour market conditions -- 5.4 Empirical estimation of shadow prices for EU regions -- 5.5 Further reading -- 5.6 Summary of Chapter 5 -- 6 The social cost of capital -- Overview -- 6.1 Rationale for discounting -- 6.2 Estimating the social discount rate -- 6.3 The social discount rate as a function of time -- 6.4 Empirical estimates of the social discount rate -- 6.5 The opportunity cost of public funds -- 6.6 Further reading -- 6.7 Summary of Chapter 6 -- 7 Welfare weights and distributional impacts -- Overview -- 7.1 Why are equity considerations needed in CBA?
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1 online resource (439 pages)
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  • (OCoLC)956675251
  • pebco1317814258

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