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Regional Welfare Weights in Investment Appraisal - The Case of India

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  • Kula, E.

Abstract

Pareto welfare criterion based only on people’s willingness to pay for the project’s output is regarded by many as being a narrow interpretation of an improvement in social well-being. A broader opinion is that even though poorer individuals may be less able to pay for a particular benefit, they may obtain greater utility from it. In line with the broader opinion, this paper looks at regional welfare weights in India on the basis of a conventional consumption utility function which assumes diminishing marginal utility. Estimated parameters are; elasticity of marginal utility of consumption, and per capita national and regional incomes which are used in the calculation of welfare weights for 17 states of India.

Suggested Citation

  • Kula, E., 2002. "Regional Welfare Weights in Investment Appraisal - The Case of India," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 32(1).
  • Handle: RePEc:ags:jrapmc:132234
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    File URL: http://purl.umn.edu/132234
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    References listed on IDEAS

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    1. Musgrave, Richard A, 1969. "Cost-Benefit Analysis and the Theory of Public Finance," Journal of Economic Literature, American Economic Association, vol. 7(3), pages 797-806, September.
    2. Betancourt, Roger R, 1971. "The Estimation of Price Elasticities from Cross-Section Data under Additive Preferences," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 12(2), pages 283-292, June.
    3. Neal Blue, E. & Tweeten, Luther, 1997. "The estimation of marginal utility of income for application to agricultural policy analysis," Agricultural Economics, Blackwell, vol. 16(3), pages 155-169, August.
    4. Jagdish N. Bhagwati & T. N. Srinivasan, 1975. "Foreign Trade Regimes and Economic Development: India," NBER Books, National Bureau of Economic Research, Inc, number bhag75-1.
    5. Murty, M N & Ray, Ranjan, 1989. " A Computational Procedure for Calculating Optimal Commodity Taxes with Illustrative Evidence from Indian Budget Data," Scandinavian Journal of Economics, Wiley Blackwell, vol. 91(4), pages 655-670.
    6. G. T. Jones, 1993. "The Social Discount Rate For Land-Use Projects In India: Comment," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(1), pages 160-165.
    7. Blue, E. Neal & Tweeten, Luther, 1997. "The estimation of marginal utility of income for application to agricultural policy analysis," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 16(3), August.
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    Citations

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    Cited by:

    1. David EVANS & Erhun KULA, 2009. "Social discount rates and welfare weights for public investment decisions under budgetary restrictions – the case of Cyprus," Departmental Working Papers 2009-19, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    2. Garey C. Durden & Patricia E. Gaynor, 2014. "Publishing in The Journal of Regional Analysis and Policy and an Evaluation (via Citation Counts) of JRAP’s Influence on Scholarship in Regional Science," Working Papers 14-07, Department of Economics, Appalachian State University.
    3. Durden, Garey C. & Gaynor, Patricia E., 2015. "Publishing in The Journal of Regional Analysis and Policy and an Evaluation (via Citation Counts) of JRAP’s Influence on Scholarship in Regional Science," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(2).
    4. Erhun KULA, 2006. "Regional welfare weights," Departmental Working Papers 2006-32, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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