On Thu, Nov 15, 2007 at 10:29:26AM -0500, Max Sawicky wrote: > If C-B is not possible, sports fans, how would your preferred from of > government make a decision about whether or not to undertake a project?
There are several issues here. Ken raised the point about interpersonal utility. He was technically correct, but cost benefit analysis is not about theory but practice. In the case of practice, interpersonal utility is not important. Max suggests to us sports fans that cost-benefit analysis is useful in this developing government programs. But sports generally require honest referees. Cost benefit analysis has been used as a hammer to support right wing agendas. My graduate school department was at the forefront of cost benefit analysis. The people there stressed how easily the technique can be manipulated. The Priceless book offers a litany of horror stories about manipulation. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com
