Chapter 11 Cost benefit analysis
Cost-benefit analysis
Intertemporal efficiency
Discount rate equality
Shifting consumption over time
Rate of return equality
Equality of discount rate and rate of return
Intertemporal optimality
Markets and intertemporal efficiency -futures markets
Markets and intertemporal efficiency -loanable funds market
Individuals – utility maximisation
Firms -present value maximisation
Optimal growth modelling; discrete time
Optimal growth modelling: continuous time
Optimal growth in the basic model
A model with resource input to production
Utility and consumption discount rates 1
Utility and consumption discount rates 2
Private project appraisal -the Net Present Value test 1
Private project appraisal -the Net Present Value test 2
Private project appraisal – risk
Social project appraisal
Social appraisal: an illustrative project
CBA as a potential pareto improvement test
CBA as welfare increase test 1
CBA as welfare increase test 2
CBA as welfare increase test 3
Choice of discount rate 1
Choice of discount rate 2
Choice of discount rate 3 -descriptive versus prescriptive
Box 11.2 Discount rate choices in practice
Environmental cost-benefit analysis
Inverse ECBA
Box 11.3 Mining at Coronation Hill?
The Krutilla-Fisher model 1
The Krutilla-Fisher model 2
The Krutilla-Fisher model 3
Discount rate adjustment?
Objections to environmental cost-benefit analysis
Limits to applicability of ECBA -sustainability and environmental valuation
Alternatives to environmental cost-benefit analysis
An illustrative transport problem
MCA – weighted sums 1
MCA -weighted sums 2
MCA -weighted sums 3
Deliberative polling
Citizens’ juries
Box 11.4 Deliberative polling and nuclear power in the UK

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