Although many researchers have investigated the value of open space in cities, few of them have compared them to the costs of providing this amenity. In this paper, we use the monocentric model of a city to derive a simple cost-benefit rule for the optimal provision of open space. The rule is...

There are many reasons that the losses caused by extreme weather events are escalating year by year in Hungary. They include Hungary's geographical characteristics, climate change, river regulation and the expansion of cultivated land. Changes in land use have hugely damaged natural capital,...

This paper uses the Kaldor-Hicks compensation principle to compute the present value (PV) of a non-marginal future event. Three theoretical results stand out: First, decreasing returns to capital create a wedge between the PV of future generations' willingness to pay (WTP) and the PV of their...

Discounting future costs and benefits is a crucial yet contentious practice in the appraisal of long-term public projects with environmental consequences. The standard approach typically neglects that ecosystem services are not easily substitutable with manufactured goods and often exhibit...

In this note we discuss how a cost–benefit analysis could be formulated in a second-best world where lump-sum taxation is not available. The question is how the government's budget is balanced. Different options are available. A value added tax or an income tax or a profit tax could be...