In most applied cost-benefit analyses, individual willingness to pay is aggregated without using explicit welfare weights. This can be justified by postulating a utilitarian social welfare function, along with the assumption of equal marginal utility of income for all individuals. However, since...

In traditional cost-benefit analyses of public projects, every citizen’s willingness to pay for a project is given an equal weight. This is sometimes taken to imply that cost-benefit analysis is a democratic method for making public decisions, as opposed to, for example, political processes...

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...

We use a CGE model to estimate the social cost of a marginal increase in public expenditure in Norway. Norway exemplifies an economy with high taxes. Distortionary taxes imply wedges between the market prices and the corresponding shadow prices. The shadow prices are unobservable, which is the...

How much is a wildflower worth? Inspired by “The worth of a songbird” by Funtowicz and Ravetz (1994) we use the value of a wildflower as symbol of the complexity of evaluating environmental qualities and risks. We critically discuss the application of cost-benefit analysis in evaluating...

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...

Do households' recycling efforts represent a social cost, which should be taken into account in cost-benefit analyses of alternative waste treatment systems? Some argue that it should not, since recycling efforts are to a large extent voluntary. We demonstrate that if the government can...