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Cost Benefit Analyses versus Referenda

  • Martin J. Osborne
  • Matthew A. Turner

We consider a planner who chooses between two public policies and ask whether a referendum or a cost benefit analysis leads to higher welfare. We find that a referendum leads to higher welfare than a cost benefit analysis in a "common value" environment. Cost benefit analysis is better in a "private value" environment. (c) 2010 by The University of Chicago. All rights reserved.

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Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 118 (2010)
Issue (Month): 1 (02)
Pages: 156-187

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Handle: RePEc:ucp:jpolec:v:118:y:2010:i:1:p:156-187
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