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Project Evaluation and the Shadow Wage: Accounting for Regional Disparities and Inequality


  • Basu, Kaushik


This paper suggests some modifications in some standard approaches to project evaluation and, especially, the computation of the shadow wage rate so as to take into account regional disparities and inequality. The paper begins by clarifying the relation between the programming and planning shadow wage. The concept of a quasi-national parameter is developed and the shadow wage is viewed as such a parameter. Finally, the possibility of the actual wage paid in the public sector being variable, within limits, is considered and the problem of simultaneously determining the optimal actual wage and the shadow wage is solved.

Suggested Citation

  • Basu, Kaushik, 1988. "Project Evaluation and the Shadow Wage: Accounting for Regional Disparities and Inequality," Public Finance = Finances publiques, , vol. 43(2), pages 212-222.
  • Handle: RePEc:pfi:pubfin:v:43:y:1988:i:2:p:212-22

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