Suchergebnisse

AbstractHumans are fundamentally social. Social activities require coordination, possibly leading to multiple equilibria in the form of self-reinforcing patterns of herd behavior. When alternative equilibria differ substantially with respect to environmental damage, they represent virtuous and vicious cycles from an environmental perspective. Such cycles can be sustained by network effects, social pressure to conform, or other mechanisms directly or indirectly yielding coordination benefits. Breaking the vicious cycles can be an important task for environmental policies. I present a stylized model of social coordination with environmental externalities, using it to discuss how environmental policies may help agents coordinate in more environment-friendly ways.

It is often argued that projects involving public good changes should be chosen on the basis of monetary valuation and cost-benefit analysis (CBA). In democratic project selection processes, however, decision-makers cannot generally interpret CBA as measuring projects' social welfare effects. The reason is partly that decision-makers' views of the good society differ - that is, they typically do not hold the same social welfare function - and partly because separating efficiency and distribution is even less straightforward in democratic than in dictatorial decision-making processes.

It is often argued that projects involving public good changes should be chosen on the basis of monetary valuation and cost–benefit analysis (CBA). However, CBA is not value-free. When used to measure welfare, it is based on highly controversial value judgements. When used to measure efficiency, it is based on assumptions of limited relevance to democratic decision-making processes. CBA measures total net willingness to pay, neither more nor less. While interesting in its own right, the normative significance of this indicator is not obvious.

Examines use of cost-benefit analysis in the political treatment of road investment planning by members of the Norwegian Parliament.

Members of the Norwegian Parliament were interviewed about the decision process concerning national road investments. Most of them found cost-benefit analysis useful, but apparently not as a device for ranking projects. Rather, the cost-benefit ratio was used to pick project proposals requiring political attention among the large number of projects included in the plan. However, information about project-related local conflicts seemed to be used much more extensively for this latter purpose. Attitudes towards cost-benefit analysis varied along the left-right political axis. These findings are shown to be consistent with a hypothesis that politicians rationally maximize subjective perceptions of social welfare.

In addition to his role as a consumer pursuing his own interests, an individual may also regard himself as an ethical observer, judging matters from society's point of view. It is not clear which of these possibly conflicting roles respondents in contingent valuation studies take on. This leads to ambiguities in the interpretation of reported willingness to pay. I formalize this problem using a simple model of respondents' behaviour, based on the concept of subjective social welfare functions. The model may provide one explanation to several puzzling phenomena often found in contingent valuation studies; such as large discrepancies between willingness to pay and willingness to accept, frequent occurrence of "outliers" willing to pay extremely large amounts, and certain kinds of framing effects.

Cost-benefit analysis have been attacked by many critics because of its implicit ethical assumptions. The normative content of the method is at odds with the common attitude that economists should analyze how to reach given goals, while determination of the goals should be left to the politicians. This paper presents a descriptive model of decision makers' behavior, demonstrating that rational, benevolent politicians will only in special cases accept the evaluation of projects resulting from a cost-benefit analysis. An alternative approach to project evaluation, which allows individual decision makers to rank projects in accordance with their own ethical views, is presented. In this framework, estimates of willingness to pay are generally not required. On the other hand, information about groups that are significantly affected by the project, as well as physical unit information on changes in the supply of public goods, is crucial.