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Distributional Weights in Benefit-Cost Analysis: Examples from Rwanda and Uganda

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Listed:
  • Moss Charles B.

    (Food and Resource Economics, University of Florida, Gainesville, FL, USA)

  • Schmitz Andrew

    (University of Florida, Gainesville, FL, USA)

Abstract

The question of how to allocate scarce agricultural research and development dollars is significant for developing countries. Historically, benefit/cost analysis has been the standard for comparing the relative benefits of alternative investments. We examine the potential of shifting the implicit equal weights approach to benefit/cost analysis, as well as how a systematic variation in welfare weights may affect different groups important to policy makers. For example, in the case of Rwandan coffee, a shift in the welfare weights that would favor small coffee producers in Rwanda over foreign consumers of Rwandan coffee would increase the support for investments in small producer coffee projects. Generally, changes in welfare weights alter the ordering for selecting investments across alternative projects.

Suggested Citation

  • Moss Charles B. & Schmitz Andrew, 2021. "Distributional Weights in Benefit-Cost Analysis: Examples from Rwanda and Uganda," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 19(1), pages 15-24, May.
    • Handle: RePEc:bpj:bjafio:v:19:y:2021:i:1:p:15-24:n:1
    DOI: 10.1515/jafio-2021-0003
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    References listed on IDEAS

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    More about this item

    Keywords

    benefit/cost analysis; investment in agricultural research and development; welfare weights;
    All these keywords.

    JEL classification:

    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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