Harberger introduced his influential 1971 essay with the
following words. This paper is intended not as a scientific study, nor
as a review of the literature, but rather as a tract - an open letter to
the profession, as it were - pleading that three basic postulates be
accepted as providing a conventional framework for applied welfare
economics. The postulates are: (a) The competitive demand price for a
given unit measures the value of that unit to the demander; (b) The
competitive supply price for a given unit measures the value of that
unit to the supplier; and (c) When evaluating the net benefits or costs
of a given action (project, programme, or policy), the costs and
benefits accruing to each member of the relevant group (e.g., a nation)
should normally be added without regard to the individual(s) to whom
they accrue.
Fundamentals of estimating the net benefits of ecosystem preservation: the case of the Salton Sea
