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Cost‐benefit analysis to provide decision criteria: A case study of municipalities in Japan

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  • Shin‐ichi Hanada

Abstract

This study explores the use of cost‐benefit analysis (CBA) as a decision‐making tool by deriving boundary values that distinguish positive and negative policy outcomes. While traditional CBA relies on fully quantifiable inputs, this approach focuses on providing reference values for uncertain variables, using CO2 emission reductions as an illustrative example. A case study of municipal subsidies for residential photovoltaic (PV) systems in Japan demonstrates how such boundary values can guide policy evaluation. The findings highlight the potential of CBA to offer objective benchmarks for policy discussions, emphasizing its utility beyond specific contexts, including CO2 reduction, to broader decision‐making scenarios.

Suggested Citation

  • Shin‐ichi Hanada, 2026. "Cost‐benefit analysis to provide decision criteria: A case study of municipalities in Japan," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 97(1), pages 207-217, March.
    • Handle: RePEc:bla:annpce:v:97:y:2026:i:1:p:207-217
    DOI: 10.1111/apce.12499
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    References listed on IDEAS

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    1. Myojo, Satoshi & Ohashi, Hiroshi, 2018. "Effects of consumer subsidies for renewable energy on industry growth and social welfare: The case of solar photovoltaic systems in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 48(C), pages 55-67.
    2. Richard S. J. Tol, 2014. "Correction and Update: The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 221-226, Spring.
    3. Joseph E. Aldy & Alan J. Krupnick & Richard G. Newell & Ian W. H. Parry & William A. Pizer, 2010. "Designing Climate Mitigation Policy," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 903-934, December.
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