IDEAS home Printed from https://ideas.repec.org/a/ucp/jlstud/v29y2000i2p1105-47.html
   My bibliography  Save this article

Implementing Cost-Benefit Analysis When Preferences Are Distorted

Author

Listed:
  • Adler, Matthew D
  • Posner, Eric A

Abstract

Cost-benefit analysis is routinely used by government agencies in order to evaluate projects, but it remains controversial among academics. This paper argues that cost-benefit analysis is best understood as a welfarist decision procedure and that use of cost-benefit analysis is more likely to maximize overall well-being than is use of alternative decision procedures. The paper focuses on the problem of distorted preferences. A person's preferences are distorted when his or her satisfaction does not enhance that person's well-being. Preferences typically thought to be distorted in this sense include disinterested preferences, uninformed preferences, adaptive preferences, and objectively bad preferences; further, preferences may be a poor guide to maximizing aggregate well-being when wealth is unequally distributed. The paper describes conditions under which agencies should correct for distorted preferences, for example, by constructing informed or nonadaptive preferences, discounting objectively bad preferences, and treating people differentially on the basis of wealth. Copyright 2000 by the University of Chicago.

Suggested Citation

  • Adler, Matthew D & Posner, Eric A, 2000. "Implementing Cost-Benefit Analysis When Preferences Are Distorted," The Journal of Legal Studies, University of Chicago Press, vol. 29(2), pages 1105-1147, June.
    • Handle: RePEc:ucp:jlstud:v:29:y:2000:i:2:p:1105-47
    DOI: 10.1086/468106
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/468106
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/468106?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Moss Charles B. & Schmitz Andrew, 2021. "Distributional Weights in Benefit-Cost Analysis: Examples from Rwanda and Uganda," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 19(1), pages 15-24, May.
    2. Kip Viscusi, W. & Gayer, Ted, 2016. "Rational Benefit Assessment for an Irrational World: Toward a Behavioral Transfer Test1," Journal of Benefit-Cost Analysis, Cambridge University Press, vol. 7(1), pages 69-91, April.
    3. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    4. Doucouliagos, Chris & Stanley, T.D. & Giles, Margaret, 2012. "Are estimates of the value of a statistical life exaggerated?," Journal of Health Economics, Elsevier, vol. 31(1), pages 197-206.
    5. W. Viscusi & Elissa Gentry, 2015. "The value of a statistical life for transportation regulations: A test of the benefits transfer methodology," Journal of Risk and Uncertainty, Springer, vol. 51(1), pages 53-77, August.
    6. Gentry, Elissa Philip & Viscusi, W. Kip, 2016. "The fatality and morbidity components of the value of statistical life," Journal of Health Economics, Elsevier, vol. 46(C), pages 90-99.
    7. Felipe Zurita, 2004. "La Tasa de Descuento Revisitada," Documentos de Trabajo 261, Instituto de Economia. Pontificia Universidad Católica de Chile..

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlstud:v:29:y:2000:i:2:p:1105-47. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JLS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.