Incorporating Distributional Issues into Benefit Cost Analysis: Why, How, and Two Empirical Examples Using Non-market Valuation
This article reviews the rationale for and various approaches used by economists to incorporate distributional consequences of projects or policies into benefit-cost analyses. Approaches reviewed include distributional weights and metrics based on the Lorenz curve. Analysis of distributional issues in partial equilibrium and general equilibrium settings are briefly reviewed. We present an empirical demonstration of how the contingent valuation method (CVM) and hedonic property methods (HPM) can be used to quantify how non-market environmental benefits are distributed by income and ethnicity. Using CVM, the distribution of non-market benefits can be cross-tabbed with respondent demographics, so that a variety of distributions of benefits by relevant demographic groups can be calculated. Using the HPM, the analyst can statistically test to see if the implicit price gradient varies with differences in income and ethnicity. In our empirical example, we find that ethnicity and income interaction terms on the implicit price gradient are statistically significant suggesting differential effects of National Forest fire suppression policies on Hispanics and low income households.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 2 (2011)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/jbca|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Harberger, Arnold C, 1984. "Basic Needs versus Distributional Weights in Social Cost-Benefit Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 32(3), pages 455-474, April.
- Robin Boadway, 1976.
"Integrating Equity and Efficiency in Applied Welfare Economics,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 90(4), pages 541-556.
- Robin Boadway, 1974. "Integrating Equity and Efficiency in Applied Welfare Economics," Working Papers 163, Queen's University, Department of Economics.
- Loomis, John B. & Asmus, Cheryl & Bell, Paul, 2007.
"A Comparison of Actual and Hypothetical Willingness to Pay of Parents and Non-Parents for Protecting Infants' Health: The Case of Nitrates in Drinking Water,"
2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN
9358, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Loomis, John B. & Bell, Paul & Cooney, Helen & Asmus, Cheryl, 2009. "A Comparison of Actual and Hypothetical Willingness to Pay of Parents and Non-Parents for Protecting Infant Health: The Case of Nitrates in Drinking Water," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(03), December.
- Scott Farrow, 2009. "Incorporating Equity in Regulatory and Benefit-Cost Analysis Using Risk Based Preferences," UMBC Economics Department Working Papers 09-117, UMBC Department of Economics.
- David A. Long & Charles D. Mallar & Craig Thornton, 1981. "Evaluating the Benefits and Costs of the Job Corps," Mathematica Policy Research Reports ba3a91e82f5f43b48bab18ea4, Mathematica Policy Research.
- Raymond M. Leuthold, 1969. "Government Payments and the Distribution of Income in Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 51(5), pages 1520-1523.
- J. Andrès Espinosa & V. Kerry Smith, 1995. "Measuring the Environmental Consequences of Trade Policy: A Nonmarket CGE Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(3), pages 772-777.
- Vining, Aidan & Weimer, David L, 2010.
"An Assessment of Important Issues Concerning the Application of Benefit-Cost Analysis to Social Policy,"
Journal of Benefit-Cost Analysis,
Cambridge University Press, vol. 1(01), pages 1-40, July.
- Vining Aidan & Weimer David L, 2010. "An Assessment of Important Issues Concerning the Application of Benefit-Cost Analysis to Social Policy," Journal of Benefit-Cost Analysis, De Gruyter, vol. 1(1), pages 1-40, July.
- Aidan R. Vining & David L. Weimer, 2013. "An assessment of important issues concerning the application of benefit–cost analysis to social policy," Chapters, in: Principles and Standards for Benefit–Cost Analysis, chapter 1, pages 25-62 Edward Elgar Publishing.
- Schmitz Andrew & Schmitz Troy G., 2010. "Benefit-Cost Analysis: Distributional Considerations under Producer Quota Buyouts," Journal of Benefit-Cost Analysis, De Gruyter, vol. 1(1), pages 1-15, July.
- Paul R. Portney, 1994. "The Contingent Valuation Debate: Why Economists Should Care," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 3-17, Fall.
- Suits, Daniel B, 1977. "Measurement of Tax Progressivity," American Economic Review, American Economic Association, vol. 67(4), pages 747-752, September.
- John B. Loomis & Pierre H. duVair, 1993. "Evaluating the Effect of Alternative Risk Communication Devices on Willingness to Pay: Results from a Dichotomous Choice Contingent Valuation Experiment," Land Economics, University of Wisconsin Press, vol. 69(3), pages 287-298.
- Peter Berck & Sandra Hoffmann, 2002. "Assessing the Employment Impacts of Environmental and Natural Resource Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 133-156, June.
- Robert N. Stavins, 1998. "What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 69-88, Summer.
- repec:reg:rpubli:299 is not listed on IDEAS
- Cornes,Richard & Sandler,Todd, 1996. "The Theory of Externalities, Public Goods, and Club Goods," Cambridge Books, Cambridge University Press, number 9780521477185, December.
- Loomis, John & Bell, Paul & Cooney, Helen & Asmus, Cheryl, 2009. "A Comparison of Actual and Hypothetical Willingness to Pay of Parents and Non-Parents for Protecting Infant Health: The Case of Nitrates in Drinking Water," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 41(03), pages 697-712, December.
- Zabel, Jeffrey E., 2004. "The demand for housing services," Journal of Housing Economics, Elsevier, vol. 13(1), pages 16-35, March.
- Schmitz, Andrew & Schmitz, Troy G., 2010. "Benefit-Cost Analysis: Distributional Considerations under Producer Quota Buyouts," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 1(01), pages 1-15, July.
- W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
- H. Spencer Banzhaf & Randall P. Walsh, 2008. "Do People Vote with Their Feet? An Empirical Test of Tiebout," American Economic Review, American Economic Association, vol. 98(3), pages 843-863, June.
- Kerry Krutilla, 2005. "Using the Kaldor-Hicks tableau format for cost-benefit analysis and policy evaluation," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 24(4), pages 864-875.
When requesting a correction, please mention this item's handle: RePEc:bpj:jbcacn:v:2:y:2011:i:1:n:5. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.