《环境与自然资源经济学》课件2 Cost-Benefit Analysis.pptVIP

Lecture 2 Cost - Benefit Analysis Lecturer: Dr. Justus Wesseler, Wageningen University Intertemporal welfare economics An allocation of resources is efficient, if it is impossible to make one individual better off without making the other individual worth off. Consider two individuals (A, B), two time periods (0,1) with utility function U and who want to maximise consumption C Intertemporal welfare economics Allocation question: how is total consumption divided between two individuals in each period? Assuming a single efficiently produced commodity that can be either consumed or added to the stock of capital for future production. Efficiency requires: 1. Equality of A and B’s consumption discount rate; 2. Equality of rates of return to investment across firms; 3. Equality of the consumption discount rate with the rate of return to investment. Intertemporal welfare economics For any given set of data, resource endowment, production function, preferences and the like = several intertemporally efficient allocations. = Choosing among the set of intertemporally efficient allocations requires a social welfare function. Cost - Benefit Analysis Project appraisal: private: social: utility based  consumption based a)  b) Environmental Cost - Benefit Analysis Project appraisal: social:  (Krutilla - Fisher model) Environmental Cost - Benefit Analysis Objections to ECBA: individuals may be inadequately informed individuals may be insufficiently deliberative in  assessing consequences of alternatives individuals lack self-knowledge individuals’ preferences may not reflect their true interests due to preference shaping from socialisation processes Environmental Cost - Benefit Analysis Alternatives to ECBA: impact assessment cost-effectiveness analysis multi-criteria analysis deliberative polling citizens’ juries * UA UA COA C1A (a) COB C1B UB UB (b) Figure 11.1 Equality of consumption discount rates (Pe