This article reconciles the use of two different marginal cost-of-funds (MCF) measures by resorting to alternative marginal benefit measures. It demonstrates how the alternative MCF measures can be properly applied to two classic problems in expenditure analysis: local cost-benefit project evaluation and the second-best public good level question. Relative strengths of the two MCF approaches in addressing the two problems are identified. Copyright 2000 by Oxford University Press.
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Article provided by Oxford University Press in its journal Economic Inquiry.
Volume (Year): 38 (2000) Issue (Month): 4 (October) Pages: 591-99 Download reference. The following formats are available: HTML
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Handle: RePEc:oup:ecinqu:v:38:y:2000:i:4:p:591-99
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Diego Martinez Lopez & A. Jesus Sanchez Fuentes, 2006.
"On the optimal level of public inputs,"
Working Papers
06.34, Universidad Pablo de Olavide, Department of Economics, revised Mar 2008.
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