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On the interpretation of ‘green’ NNP measures as cost-benefit rules

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  • Per-Olov Johansson
  • Karl-Gustaf Löfgren

Abstract

In this paper we consider the possibility of using ‘green’ welfare change measures as the basis for cost-benefit analysis of new projects. Such green welfare change measures look very similar to what one would expect a cost-benefit analysis of the entire economy to look like. It is shown that although green welfare measures contain the shadow prices needed in the evaluation of a small new project, one must account for changes in these prices. Copyright Kluwer Academic Publishers 1996

Suggested Citation

  • Per-Olov Johansson & Karl-Gustaf Löfgren, 1996. "On the interpretation of ‘green’ NNP measures as cost-benefit rules," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(3), pages 243-250, April.
    • Handle: RePEc:kap:enreec:v:7:y:1996:i:3:p:243-250
    DOI: 10.1007/BF00782147
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    References listed on IDEAS

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    1. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    2. Vellinga, Nico & Withagen, Cees, 1996. "On the Concept of Green National Income," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 499-514, October.
    3. Hartwick, John M., 1991. "Degradation of environmental capital and national accounting procedures," European Economic Review, Elsevier, vol. 35(2-3), pages 642-649, April.
    4. LaFrance, Jeffrey T. & Barney, L. Dwayne, 1991. "The envelope theorem in dynamic optimization," Journal of Economic Dynamics and Control, Elsevier, vol. 15(2), pages 355-385, April.
    5. repec:bla:scandj:v:88:y:1986:i:1:p:141-49 is not listed on IDEAS
    6. Caputo, Michael R., 1990. "How to do comparative dynamics on the back of an envelope in optimal control theory," Journal of Economic Dynamics and Control, Elsevier, vol. 14(3-4), pages 655-683, October.
    7. Johansson, Per-Olov & Lofgren, Karl-Gustaf, 1995. "Wealth from optimal health," Journal of Health Economics, Elsevier, vol. 14(1), pages 65-79, May.
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    Citations

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    Cited by:

    1. Dasgupta, Partha, 2000. "Valuation and Evaluation: Measuring the Quality of Life and Evaluating Policy," Discussion Papers 10560, Resources for the Future.
    2. Harris, M., 2000. "Some Unpleasant Natural Resource Accounting Arithmetic: The Welfare Inconsitency of," Department of Economics - Working Papers Series 765, The University of Melbourne.
    3. Withagen, C. A. A. M., 1996. "Sustainability and investment rules," Economics Letters, Elsevier, vol. 53(1), pages 1-6, October.
    4. repec:bla:germec:v:9:y:2008:i::p:1-16 is not listed on IDEAS
    5. Dasgupta, Partha, 2000. "Valuation and evaluation: measuring the quality of life and evaluating policy," LSE Research Online Documents on Economics 6657, London School of Economics and Political Science, LSE Library.
    6. Dasgupta, Partha, 2000. "Valuation and Evaluation: Measuring the Quality of Life and Evaluating Public Policy," RFF Working Paper Series dp-00-24, Resources for the Future.
    7. Harris, Michael & Fraser, Iain, 2002. "Natural resource accounting in theory and practice: A critical assessment," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(2), pages 1-54.
    8. Li, Chuan-Zhong & Löfgren, Karl-Gustaf, 2002. "On the Choice of Metrics in Dynamic Welfare Analysis: Utility versus Money Measures," Umeå Economic Studies 590, Umeå University, Department of Economics.

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