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Measuring Welfare Gains from Better Quality Infrastructure

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  • Irina Klytchnikova

    (The World Bank, iklytchnikova@worldbank.org)

  • Michael Lokshin

    (The World Bank, mlokshin@worldbank.org)

Abstract

Projects and reforms targeting infrastructure services can affect consumer welfare through changes in the price, coverage, or quality of the services provided. The benefits of improved service quality—while significant—are often overlooked because they are difficult to quantify. This article reviews methods of evaluating the welfare implications of changes in the quality of infrastructure services within the broader theoretical perspective of welfare measurement. The study outlines the theoretical assumptions and data requirements involved, illustrating each method with examples that highlight common methodological features and differences. The article also presents the theoretical underpinnings and potential applications of a new approach to analysing the effects of interruptions in the supply of infrastructure services on household welfare.

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Bibliographic Info

Article provided by India Development Foundation in its journal Journal of Infrastructure Development.

Volume (Year): 1 (2009)
Issue (Month): 2 (December)
Pages: 87-109

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Handle: RePEc:sae:jouinf:v:1:y:2009:i:2:p:87-109

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Keywords: JEL Classification: H54; JEL Classification: Q26; Willingness to pay; contingent valuation; averting behaviour; conjoint analysis; household welfare;

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References

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Cited by:
  1. Shaun McRae, 2009. "Infrastructure Quality and the Subsidy Trap," Discussion Papers, Stanford Institute for Economic Policy Research 09-017, Stanford Institute for Economic Policy Research, revised Nov 2009.

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