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Cost Benefit Analyses versus Referenda

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  • Martin J. Osborne
  • Matthew A. Turner

Abstract

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.

Suggested Citation

  • Martin J. Osborne & Matthew A. Turner, 2010. "Cost Benefit Analyses versus Referenda," Journal of Political Economy, University of Chicago Press, vol. 118(1), pages 156-187, February.
  • Handle: RePEc:ucp:jpolec:v:118:y:2010:i:1:p:156-187
    DOI: 10.1086/650305
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Technocrats vs. Referenda
      by Economic Logician in Economic Logic on 2010-05-14 19:17:00

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    2. Portuese, Aurelien, 2018. "Towards a Meta Cost-benefit Analysis: The Case of Brexit," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 19(1), June.
    3. Ahlfeldt, Gabriel M. & Maennig, Wolfgang & Mueller, Steffen Q., 2022. "The generation gap in direct democracy: Age vs. cohort effects," European Journal of Political Economy, Elsevier, vol. 72(C).
    4. Felix Arnold & Ronny Freier & Magdalena Pallauf & David Stadelmann, 2015. "Voting for direct democratic participation: Evidence from an initiative election," CREMA Working Paper Series 2015-11, Center for Research in Economics, Management and the Arts (CREMA).
    5. Luigi Alberto Franzoni, 2018. "The Voter in the House of Mirrors: Comment on “Proposals for a Democracy of the Future” by Bruno Frey," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 35(1), pages 117-121, June.
    6. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease versus noise: long-run changes in the value of transport (dis)amenities," LSE Research Online Documents on Economics 102824, London School of Economics and Political Science, LSE Library.
    7. Ahlfeldt, Gabriel M. & Maennig, Wolfgang, 2015. "Homevoters vs. leasevoters: A spatial analysis of airport effects," Journal of Urban Economics, Elsevier, vol. 87(C), pages 85-99.
    8. Stadelmann, David & Portmann, Marco & Eichenberger, Reiner, 2013. "Quantifying parliamentary representation of constituents’ preferences with quasi-experimental data," Journal of Comparative Economics, Elsevier, vol. 41(1), pages 170-180.
    9. Chakravarty, Surajeet & Kaplan, Todd R. & Myles, Gareth, 2018. "When costly voting is beneficial," Journal of Public Economics, Elsevier, vol. 167(C), pages 33-42.
    10. Laurent Bouton & Micael Castanheira, 2012. "One Person, Many Votes: Divided Majority and Information Aggregation," Econometrica, Econometric Society, vol. 80(1), pages 43-87, January.
    11. Gabriel Ahlfeldt & Volker Nitsch & Nicolai Wendland, 2016. "Ease vs. Noise: On the Conflicting Effects of Transportation Infrastructure," CESifo Working Paper Series 6058, CESifo.
    12. Qingqing Cheng & Ming Li, 2019. "Optimal Majority Rule in Referenda," Games, MDPI, vol. 10(2), pages 1-23, June.
    13. Stadelmann, David & Torrens, Gustavo, 2020. "Who is the ultimate boss of legislators: Voters, special interest groups or parties?," VfS Annual Conference 2020 (Virtual Conference): Gender Economics 224562, Verein für Socialpolitik / German Economic Association.
    14. Felix Arnold & Ronny Freier & Magdalena Pallauf & David Stadelmann, 2014. "Voting for Direct Democracy: Evidence from a Unique Popular Initiative in Bavaria," Discussion Papers of DIW Berlin 1435, DIW Berlin, German Institute for Economic Research.

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