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Altruism in cost-benefit analysis

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  • Per-Olov Johansson

Abstract

It has recently been argued that altruistic motives for paying for a public sector project should be ignored in a cost-benefit analysis. The reason is that including altruism would mean a kind of double counting of the project's benefits. This paper takes a look at these arguments, and derives cost-benefit rules which cover different kinds of altruism. The paper also provides some recommendations for the treatment of altruism in studies using the contingent valuation method. Copyright Kluwer Academic Publishers 1992

Suggested Citation

  • Per-Olov Johansson, 1992. "Altruism in cost-benefit analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(6), pages 605-613, November.
    • Handle: RePEc:kap:enreec:v:2:y:1992:i:6:p:605-613
    DOI: 10.1007/BF00330286
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    References listed on IDEAS

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    1. Jones-Lee, M W, 1992. "Paternalistic Altruism and the Value of Statistical Life," Economic Journal, Royal Economic Society, vol. 102(410), pages 80-90, January.
    2. Johansson,Per-Olov, 1991. "An Introduction to Modern Welfare Economics," Cambridge Books, Cambridge University Press, number 9780521356954.
    3. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    4. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-477, June.
    5. Bruce C. Greenwald & Joseph E. Stiglitz, 1984. "Pecuniary & Market Mediated Externalities: Towards a General Theory of the Welfare Economics & Economies with Imperfect Information & Incomplete Mrkts," NBER Working Papers 1304, National Bureau of Economic Research, Inc.
    6. Jones-Lee, M W, 1991. "Altruism and the Value of Other People's Safety," Journal of Risk and Uncertainty, Springer, vol. 4(2), pages 213-219, April.
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    Cited by:

    1. Dennis Kaufman, 1995. "Negative externalities and welfare improving preference changes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(1), pages 53-71, July.
    2. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    3. Brekke, Kjell Arne & Nyborg, Karine, 2005. "Moral hazard and moral motivation: Corporate social responsibility as labor market screening," Memorandum 25/2004, Oslo University, Department of Economics.
    4. Olivier Chanel & Stéphane Luchini & Alain Paraponaris & Christel Protière & Jean-Christophe Vergnaud, 2004. "Les consentements à payer pour des programmes de prévention sanitaire incluent-ils de l'altruisme ?. Enseignements d'une enquête sur la fièvre Q," Revue économique, Presses de Sciences-Po, vol. 55(5), pages 923-945.
    5. Veisten, Knut, 2007. "Contingent valuation controversies: Philosophic debates about economic theory," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(2), pages 204-232, April.
    6. A. Nentjes, 1994. "Financial Instruments for the Control of Transboundary Pollution," Working Papers wp94024, International Institute for Applied Systems Analysis.
    7. Olof Johansson-Stenman, 1998. "The Importance of Ethics in Environmental Economics with a Focus on Existence Values," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 429-442, April.
    8. Peter Howley & Stephen Hynes & Cathal O’Donoghue, 2009. "The citizen versus consumer hypothesis: Do welfare estimates differ?," Working Papers 0911, Rural Economy and Development Programme,Teagasc.
    9. Zerbe, Richard Jr. & Bauman, Yoram & Finkle, Aaron, 2006. "An aggregate measure for benefit-cost analysis," Ecological Economics, Elsevier, vol. 58(3), pages 449-461, June.
    10. Richard Zerbe, 2004. "Should moral sentiments be incorporated into benefit-cost analysis? An example of long-term discounting," Policy Sciences, Springer;Society of Policy Sciences, vol. 37(3), pages 305-318, December.
    11. Flores, Nicholas E., 2002. "Non-paternalistic altruism and welfare economics," Journal of Public Economics, Elsevier, vol. 83(2), pages 293-305, February.

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