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Objective or Multi-Objective? Two Historically Competing Visions for Benefit-Cost Analysis

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  • H. Spencer Banzhaf

Abstract

As they embraced benefit-cost analysis during the mid twentieth century, economists faced several challenges. One challenge was to reconcile two visions for the place of the economist in policy analysis, one limited to providing positive analysis for decision-makers, the other allowing normative judgments. This tension came to a crisis when, in the 1960s, the Water Resources Council introduced multi-objective benefit-cost analysis. The surrounding debate highlights the way philosophical differences can drive the technical details of policy analysis, the way political debates can overshadow academic ones, and the way even social scientists in a narrow subfield can profoundly misunderstand one another.

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  • H. Spencer Banzhaf, 2009. "Objective or Multi-Objective? Two Historically Competing Visions for Benefit-Cost Analysis," Land Economics, University of Wisconsin Press, vol. 85(1), pages 3-23.
    • Handle: RePEc:uwp:landec:v:85:y:2009:i:1:p:3-23
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    References listed on IDEAS

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    1. Stephen A. Marglin, 1963. "The Social Rate of Discount and The Optimal Rate of Investment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 77(1), pages 95-111.
    2. Emery Castle & Maurice Kelso & Delworth Gardner, 1963. "Water Resources Development: A Review of the New Federal Evaluation Procedures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 45(4), pages 693-704.
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    7. Otto Eckstein, 1957. "Investment Criteria for Economic Development and the Theory of Intertemporal Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 71(1), pages 56-85.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. History of policy evaluation: a few questions
      by Beatrice Cherrier in History of Economics Playground on 2015-02-05 21:26:43

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    Cited by:

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    2. Stuart D. Allen & Stephen K. Layson & Albert N. Link, 2013. "Public gains from entrepreneurial research: Inferences about the economic value of public support of the Small Business Innovation Research program," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 6, pages 105-112, Edward Elgar Publishing.
    3. Aldred, Jonathan, 2013. "Justifying precautionary policies: Incommensurability and uncertainty," Ecological Economics, Elsevier, vol. 96(C), pages 132-140.
    4. Dale Whittington & Richard T. Carson & Thomas Sterner, 2023. "Policy Note: Benefit Cost Analysis of Water Investments in the Anthropocene," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 9(03), pages 1-23, July.
    5. Roger Backhouse & Beatrice Cherrier, 2014. "Becoming Applied: The Transformation of Economics after 1970," Discussion Papers 14-11, Department of Economics, University of Birmingham.
    6. Banzhaf, H. Spencer, 2016. "Constructing markets: environmental economics and the contingent valuation controversy," MPRA Paper 78814, University Library of Munich, Germany.
    7. Lucian Mocrei-Rebrean, 2022. "The Lockean Proviso and Orbital Sustainability—An Anthropological View," Sustainability, MDPI, vol. 14(7), pages 1-13, March.
    8. Gregory Garner & Patrick Reed & Klaus Keller, 2016. "Climate risk management requires explicit representation of societal trade-offs," Climatic Change, Springer, vol. 134(4), pages 713-723, February.
    9. H. Spencer Banzhaf, 2014. "Retrospectives: The Cold-War Origins of the Value of Statistical Life," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 213-226, Fall.
    10. Carolus, Johannes Friedrich & Hanley, Nick & Olsen, Søren Bøye & Pedersen, Søren Marcus, 2018. "A Bottom-up Approach to Environmental Cost-Benefit Analysis," Ecological Economics, Elsevier, vol. 152(C), pages 282-295.
    11. Gregory Garner & Patrick Reed & Klaus Keller, 2016. "Climate risk management requires explicit representation of societal trade-offs," Climatic Change, Springer, vol. 134(4), pages 713-723, February.
    12. Berta, Nathalie, 2020. "Efficiency without Optimality: A Pragmatic Compromise for Environmental Policies in the Late 1960s," OSF Preprints wp2xf, Center for Open Science.
    13. Jaeger, William K. & Egelkraut, Thorsten M., 2011. "Biofuel economics in a setting of multiple objectives and unintended consequences," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4320-4333.
    14. Weber, Shlomo & Castaneda Dower, Paul & Markevich, Andrei, 2018. "The Value of a Statistical Life in a Dictatorship: Evidence from Stalin," CEPR Discussion Papers 12814, C.E.P.R. Discussion Papers.
    15. Castañeda Dower, Paul & Markevich, Andrei & Weber, Shlomo, 2021. "The value of a statistical life in a dictatorship: Evidence from Stalin," European Economic Review, Elsevier, vol. 133(C).

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    More about this item

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • D6 - Microeconomics - - Welfare Economics
    • H4 - Public Economics - - Publicly Provided Goods

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