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Valuing Foreign Lives and Settlements


  • Dana David A.

    (Northwestern University School of Law)


Cost-benefit analysis in the United States for policy and legal purposes traditionally has been highly parochial, excluding not just losses or gains of welfare to non-U.S. residents from a given policy but also excluding any losses or gains in welfare U.S. residents would experience as a result of impacts to foreigners and foreign settlements. In the climate change context, this approach has meant that cost-benefit analyses for the costs of unmitigated climate change to the United States value at zero the losses that U.S. residents will bear as a result of the direct, adverse impacts of climate change to foreign lives and settlements. This article argues that there are sound theoretical reasons to include such welfare losses in a cost-benefit analysis, and that doing so requires going beyond revealed preference data to consider stated preference surveys. The article presents the findings of internet-based surveys that strongly suggest that the implicit assumption of the current approach to cost-benefit analysis in the United Statesthat U.S. residents value foreign lives and settlements that may be destroyed by climate change at zerois untenable.

Suggested Citation

  • Dana David A., 2010. "Valuing Foreign Lives and Settlements," Journal of Benefit-Cost Analysis, De Gruyter, vol. 1(1), pages 1-26, July.
  • Handle: RePEc:bpj:jbcacn:v:1:y:2010:i:1:n:4

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