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Benefit-Cost Analysis: A Pedagogical Note

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  • Elchanan Cohn

Abstract

All major pubic finance texts offer some treatment of benefit-cost analysis. The typical treatment, however, glosses over the welfare economic foundations of modern benefit-cost analysis and therefore denies the student a broader view of the subject. The student might be misled to believe that, although some difficulties arise in the application of the benefit-cost techniques, the basic idea of conducting benefit-cost analysis is relatively noncontroversial. In addition, almost all textbooks give an incomplete treatment to the ranking of alternative projects, comparisons of alternative decision criteria, and other problems associated with benefit-cost analysis. This article attempts to address some of these gaps.

Suggested Citation

  • Elchanan Cohn, 2003. "Benefit-Cost Analysis: A Pedagogical Note," Public Finance Review, , vol. 31(5), pages 534-549, September.
    • Handle: RePEc:sae:pubfin:v:31:y:2003:i:5:p:534-549
    DOI: 10.1177/1091142103254936
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    References listed on IDEAS

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    1. Harberger, Arnold C, 1978. "On the Use of Distributional Weights in Social Cost-Benefit Analysis," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 87-120, April.
    2. Joseph Persky, 2001. "Cost-Benefit Analysis and the Classical Creed," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 199-208, Fall.
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