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Personal goods, efficiency and the law

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  • Usher, Dan

Abstract

Personal goods, such as leisure and life expectancy, have no unique market price which is the same for everybody. When personal goods are arguments in the utility fucntion and when everybody's utility function is the same, the valuation of personal goods is higher for rich people than for poor people. Thus, rigidly applied in cost-benefit analysis or in the design of the law, the efficiency criterion places a higher value upon the life of a rich person than upon the life of a poor person.
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  • Usher, Dan, 2001. "Personal goods, efficiency and the law," European Journal of Political Economy, Elsevier, vol. 17(4), pages 673-703, November.
    • Handle: RePEc:eee:poleco:v:17:y:2001:i:4:p:673-703
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    Cited by:

    1. Liqun Liu, 2004. "Comorbidities and the willingness to pay for reducing the risk of a targeted disease: introducing endogenous effort for risk reduction," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 493-498, May.
    2. Olof Johansson-Stenman, 2005. "Distributional Weights in Cost-Benefit Analysis—Should We Forget about Them?," Land Economics, University of Wisconsin Press, vol. 81(3).

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    More about this item

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • K1 - Law and Economics - - Basic Areas of Law

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