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A Comparison of Benefit Cost and Cost Utility Analysis in Practice: Divergent Policies in Sweden

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  • Hultkrantz, Lars

    ()
    (Örebro University)

  • Svensson, Mikael

    ()
    (Dept. of Economics)

Abstract

We compare the implementation of Benefit-Cost Analysis (BCA) and Cost-Utility Analysis (CUA) as tools for making priorities in allocation of national public funds in the transport sector and health sector, respectively, in Sweden. While the principal distinctions between these methods are well known, less notice has been given to a number of other differences that have emerged as national and international practices have evolved over time along separate lines. We compare cost and benefit components and economic parameter values and find some surprising disparities. There are inconsistencies, both across methods and within each method. Both can be improved by learning from the other. We also find that some current practices conflict with the underlying welfare theory and/or insights from recent empirical analysis.

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Bibliographic Info

Paper provided by Department of Economics, Karlstad University in its series Karlstad University Working Papers in Economics with number 1.

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Length: 34 pages
Date of creation: 02 Apr 2012
Date of revision:
Handle: RePEc:hhs:kaunek:0001

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Postal: Dept of Economics, Karlstad University, Universitetsgatan 1, SE 651 88 Karlstad, Sweden
Phone: 054 - 700 13 56
Fax: 054 - 700 14 97
Web page: http://www.kau.se/node/12323
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Keywords: Economic evaluation methods; Cost-Benefit Analysis; Cost-Effectiveness Analysis; Guidelines;

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  14. Robin Boadway, 2010. "Efficiency and Redistribution: An Evaluative Review of Louis Kaplow's The Theory of Taxation and Public Economics," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 964-79, December.
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