scholarly journals Benefit-cost analysis: government compensation vs. consumer tax model

2013 ◽  
Vol 4 (3) ◽  
pp. 375-389 ◽  
Author(s):  
Andrew Schmitz ◽  
Dwayne J. Haynes ◽  
Troy G. Schmitz
Keyword(s):  
Cost Analysis ◽  
Empirical Comparison ◽  
Benefit Cost Analysis ◽  
Tobacco Tax ◽  
The Us ◽  
Efficiency Losses ◽  
Benefit Cost ◽  
Production Quota ◽  
Tobacco Buyout

We provide a theoretical and empirical comparison of two historic production quota buyouts: the 2002 US Peanut Quota Buyout and the 2004 US Tobacco Quota Buyout. Producer compensation under the US Peanut Quota Buyout came from the treasury while the US Tobacco Buyout was paid for by a consumer tax (i.e., tobacco tax). Given these two buyouts, an important question arises: How does the method of compensation affect distribution and efficiency? Producers, consumers, and society favor a treasury buyout (TB) for several reasons. Producers are compensated considerably more under a TB, consumers are not burdened with the charge of funding the buyout, and society does not face additional efficiency losses due to the buyout.

Introduction: benefit-cost analysis and the environment in developing countries

1997 ◽  
Vol 2 (2) ◽  
pp. 195-221
Keyword(s):  
Cost Analysis ◽  
Ad Hoc ◽  
Health And Safety ◽  
Environmental Health And Safety ◽  
Benefit Cost Analysis ◽  
Project Appraisal ◽  
The Us ◽  
Pros And Cons ◽  
The Moment ◽  
Benefit Cost

In one sense, everyone making a decision of any consequence uses something very like benefit-cost analysis. That is, they weigh up the pros and cons of the options confronting them and decide between them accordingly. Benefit-cost analysis is merely one systematic way of evaluating the economically relevant pros and cons of various options. The authors of the project appraisal manuals of the early 1970s (Mishan, 1971; Dasgupta et al., 1972; Pearce, 1972; Little and Mirrlees, 1974) were interested in establishing a set of rules that might ensure that the results of distinct social investment decisions would be efficient (or at least consistent). On the surface, the paper by Arrow et al. (1996) that is the focus of this forum merely argues for an extension of benefit-cost rules to an area where, as David Pearce points out in his commentary, policy-making tends to be dominated by hasty, ill-conceived, ad hoc responses to the pressures of the moment. The paper argues that environmental, health and safety regulations in the US could and should be informed by an analysis of their economically relevant costs and benefits.

What’s in, what’s out? Towards a rigorous definition of the boundaries of benefit-cost analysis

2021 ◽  
pp. 1-17
Author(s):  
Daniel Acland
Keyword(s):  
Cost Analysis ◽  
Willingness To Pay ◽  
Low Cost ◽  
Consumer Sovereignty ◽  
Benefit Cost Analysis ◽  
Rigorous Definition ◽  
Pareto Criterion ◽  
Definition Of ◽  
Benefit Cost

Abstract Benefit-cost analysis (BCA) is typically defined as an implementation of the potential Pareto criterion, which requires inclusion of any impact for which individuals have willingness to pay (WTP). This definition is incompatible with the exclusion of impacts such as rights and distributional concerns, for which individuals do have WTP. I propose a new definition: BCA should include only impacts for which consumer sovereignty should govern. This is because WTP implicitly preserves consumer sovereignty, and is thus only appropriate for ‘sovereignty-warranting’ impacts. I compare the high cost of including non-sovereignty-warranting impacts to the relatively low cost of excluding sovereignty-warranting impacts.

Distributional Weights in Benefit-Cost Analysis: Examples from Rwanda and Uganda

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Charles B. Moss ◽  
Andrew Schmitz
Keyword(s):  
Developing Countries ◽  
Cost Analysis ◽  
Research And Development ◽  
Agricultural Research ◽  
Systematic Variation ◽  
Policy Makers ◽  
Benefit Cost Analysis ◽  
Small Producer ◽  
Agricultural Research And Development ◽  
Benefit Cost

Abstract The question of how to allocate scarce agricultural research and development dollars is significant for developing countries. Historically, benefit/cost analysis has been the standard for comparing the relative benefits of alternative investments. We examine the potential of shifting the implicit equal weights approach to benefit/cost analysis, as well as how a systematic variation in welfare weights may affect different groups important to policy makers. For example, in the case of Rwandan coffee, a shift in the welfare weights that would favor small coffee producers in Rwanda over foreign consumers of Rwandan coffee would increase the support for investments in small producer coffee projects. Generally, changes in welfare weights alter the ordering for selecting investments across alternative projects.

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