This text aims at coping with some issues of prices definition in the current practice of Cost Benefit Analysis (CBA) and at showing the importance of right choices in this matter. Taking as an example the case of transport infrastructure project, it takes a few points of application. First it assesses the consequences of forgetting the strategic interactions between operators involved in the new infrastructure and their consequences on the prices of transport services which should be endogenously determined by the market structure. Second it shows how it is possible to optimize programs when, for one reason or another, the current discount rate does not allow implementing all profitable schemes, in other words when a budget constraint remains. Third it explores the consequences of changing relative prices in the case of environmental goods, and extending sufficiently the time horizon in order to take into account these relative changes may lead to conclusions very different from the usual results of current CBA practice, and for instance reconcile individual CBA results with the current macro economic debate on GHG effects.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Department of Economics University of Milan Italy in its series Departemental Working Papers with number
2009-22.