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Objective or Multi-Objective? Two Historically Competing Visions for Benefit-Cost Analysis


  • H. Spencer Banzhaf


As they embraced benefit-cost analysis during the mid twentieth century, economists faced several challenges. One challenge was to reconcile two visions for the place of the economist in policy analysis, one limited to providing positive analysis for decision-makers, the other allowing normative judgments. This tension came to a crisis when, in the 1960s, the Water Resources Council introduced multi-objective benefit-cost analysis. The surrounding debate highlights the way philosophical differences can drive the technical details of policy analysis, the way political debates can overshadow academic ones, and the way even social scientists in a narrow subfield can profoundly misunderstand one another.

Suggested Citation

  • H. Spencer Banzhaf, 2009. "Objective or Multi-Objective? Two Historically Competing Visions for Benefit-Cost Analysis," Land Economics, University of Wisconsin Press, vol. 85(1), pages 3-23.
  • Handle: RePEc:uwp:landec:v:85:y:2009:i:1:p:3-23

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    References listed on IDEAS

    1. Stephen A. Marglin, 1963. "The Social Rate of Discount and The Optimal Rate of Investment," The Quarterly Journal of Economics, Oxford University Press, vol. 77(1), pages 95-111.
    2. Robert J. Kalter & Thomas H. Stevens, 1971. "Resource Investments, Impact Distribution, and Evaluation Concepts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(2), pages 206-215.
    3. Gary D. Cobb, 1973. "Evolving Water Policies in the United States," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(5), pages 1003-1007.
    4. Daniel W. Bromley & Bruce R. Beattie, 1973. "On the Incongruity of Program Objectives and Project Evaluation: An Example from the Reclamation Program," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(3), pages 472-476.
    5. Harberger, Arnold C, 1971. "Three Basic Postulates for Applied Welfare Economics: An Interpretive Essay," Journal of Economic Literature, American Economic Association, vol. 9(3), pages 785-797, September.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. History of policy evaluation: a few questions
      by Beatrice Cherrier in History of Economics Playground on 2015-02-05 21:26:43


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    1. Jaeger, William K. & Egelkraut, Thorsten M., 2011. "Biofuel economics in a setting of multiple objectives and unintended consequences," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4320-4333.
    2. Roger E. Backhouse & Beatrice Cherrier, 2014. "Becoming Applied: The Transformation of Economics after 1970," Center for the History of Political Economy Working Paper Series 2014-15, Center for the History of Political Economy.
    3. Beatrice Cherrier & Jean-Baptiste Fleury, 2017. "Economists’ interest in collective decision after World War II: a history," Public Choice, Springer, vol. 172(1), pages 23-44, July.
    4. Stuart D. Allen & Stephen K. Layson & Albert N. Link, 2013. "Public gains from entrepreneurial research: Inferences about the economic value of public support of the Small Business Innovation Research program," Chapters, in: Public Support of Innovation in Entrepreneurial Firms, chapter 6, pages 105-112, Edward Elgar Publishing.
    5. H. Spencer Banzhaf, 2014. "Retrospectives: The Cold-War Origins of the Value of Statistical Life," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 213-226, Fall.
    6. Banzhaf, H. Spencer, 2016. "Constructing markets: environmental economics and the contingent valuation controversy," MPRA Paper 78814, University Library of Munich, Germany.
    7. Aldred, Jonathan, 2013. "Justifying precautionary policies: Incommensurability and uncertainty," Ecological Economics, Elsevier, vol. 96(C), pages 132-140.
    8. Carolus, Johannes Friedrich & Hanley, Nick & Olsen, Søren Bøye & Pedersen, Søren Marcus, 2018. "A Bottom-up Approach to Environmental Cost-Benefit Analysis," Ecological Economics, Elsevier, vol. 152(C), pages 282-295.
    9. Gregory Garner & Patrick Reed & Klaus Keller, 2016. "Climate risk management requires explicit representation of societal trade-offs," Climatic Change, Springer, vol. 134(4), pages 713-723, February.

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    More about this item

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • D6 - Microeconomics - - Welfare Economics
    • H4 - Public Economics - - Publicly Provided Goods


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