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

Author

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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    1. Richard E, Just & Darrell L. Heuth & Andrew Schmitz, 2004. "The Welfare Economics of Public Policy," Books, Edward Elgar Publishing, number 3342.
    2. Adler, Matthew D & Posner, Eric A, 2000. "Implementing Cost-Benefit Analysis When Preferences Are Distorted," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 1105-1147, June.
    3. Ryan Cardwell & Chad Lawley & Di Xiang, 2015. "Milked and Feathered: The Regressive Welfare Effects of Canada's Supply Management Regime," Canadian Public Policy, University of Toronto Press, vol. 41(1), pages 1-14, March.
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    5. Pritish Behuria, 2020. "The domestic political economy of upgrading in global value chains: how politics shapes pathways for upgrading in Rwanda’s coffee sector," Review of International Political Economy, Taylor & Francis Journals, vol. 27(2), pages 348-376, March.
    6. Arnold C. Harberger, 1978. "On the Use of Distributional Weights in Social Cost-Benefit Analysis," NBER Chapters, in: Research in Taxation, pages 87-120, National Bureau of Economic Research, Inc.
    7. Coate, Stephen, 2000. "An Efficiency Approach to the Evaluation of Policy Changes," Economic Journal, Royal Economic Society, vol. 110(463), pages 437-455, April.
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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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