Cost-Benefit Analysis, Incommensurability and Rough Equality
AbstractA recurring question about cost-benefit analysis (CBA) concerns its scope. CBA is a decision-making method frequently employed in environmental policy-making, in which things which have no market price are treated as if they were commodities. They are given a monetary value, a form of price. But it is widely held that some things cannot be meaningfully priced, thus substantially limiting the scope of CBA. The aim of this paper is to test some aspects of this broad claim, focusing on problems of incomparability and incommensurability. In particular, the role of rough equality as a putative form of comparison is investigated. I argue that while an assessment of the full significance of rough equality for practical decision-making awaits resolution of a number of important technical questions, it does not provide a strong enough form of comparison to support CBA.
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Bibliographic InfoArticle provided by White Horse Press in its journal Environmental Values.
Volume (Year): 11 (2002)
Issue (Month): 1 (February)
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Web page: http://www.erica.demon.co.uk
environmental valuation; cost-benefit analysis; incomparability; incommensurability; commodification; rough equality;
Find related papers by JEL classification:
- D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
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