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- Title
Constraints on Public Action and Rules for Social Decision.
- Authors
Bradford, David F.
- Abstract
This article presents an analysis of Robert Dorfman's theoretical paradox, using it as a vehicle for exploring the prescriptive force of benefit-cost techniques. Benefit-cost analysis attempts to discover what quantities of some specified goods are considered by the gainers and losers from some proposed government action to be just equivalent in value to their respective gains and losses. The algebraic sum of the quantities of goods over all individuals is then used to assist in deciding whether to undertake the action. It is pointed out that a project passes the benefit-cost test if this net sum is positive. There is at least a presumption that projects passing the benefit-cost test should be undertaken, and those failing should be rejected.
- Subjects
INDUSTRIAL costs; COST effectiveness; SOCIAL policy; COST; ECONOMICS; INVESTMENTS; DORFMAN, Robert; ECONOMISTS
- Publication
American Economic Review, 1970, Vol 60, Issue 4, p642
- ISSN
0002-8282
- Publication type
Article