AN EVALUATION OF COST‐BENEFIT ANALYSIS CRITERIA*
| Author | Christopher Nash,John Stanley,David Pearce |
| DOI | http://doi.org/10.1111/j.1467-9485.1975.tb00054.x |
| Date | 01 June 1975 |
| Published date | 01 June 1975 |
Scottish
Joiimal
of
Political
Economy
Vol.
XXII,
No.
2,
June
1975
SCOTTISH
JOURNAL
OF
POLITICAL
ECONOMY
June
1975
AN EVALUATION
OF
COST-BENEFIT
ANALYSIS CRITERIA*
CHRISTOPHER NASH, DAVID PEARCE
AND
JOHN
STANLEY
f-
I
INTRODUCTION
Since its beginnings as a pragmatic and somewhat ill thought-out method
of evaluating water-resource projects in the 1930's, the practice of cost-
benefit analysis has spread
to
encompass most areas of government decision-
taking, ranging from fuel policy and industrial project evaluation to health
and social services. Throughout this period, whilst advances have been
made in the development of measurement techniques and in avoiding some
of the early mistakes (such as double-counting of benefits), there has been
surprisingly little debate about the fundamental principles
of
cost-benefit
analysis.
However, recent arguments over the legitimacy of the distributive weight-
ing of costs and benefits, and the role of shadow prices derived from
government preferences, signify the existence
of
major disagreements about
*
We are very much indebted to our former colleagues at Southampton University,
John Aldrich, Peter Simmons and Professor John Wise, for helpful comments on
the first draft of this paper (Southampton University Discussion Paper
No.
7311).
We also owe
a
special debt
of
thanks to Michael Whitbread of the Centre for
Environmental Studies, and
to
Tony Culyer and Professor Alan Williams of York
University who provided detailed comments
on
parts of the initial draft. It remains
the case that we have chosen deliberately to persist in certain views that we know are
not palatable to one
or
more
of
this long list of helpful critics. For these differences
in philosophy we do not apologise. For inconsistency and downright error, which
would have been far greater had we not received their help, we do.
-f
The authors are, respectively, Lecturer in Rail Transport, Institute for Transport
Studies, Leeds University; Director, Public Sector Economic Research Centre, Leicester
University; Deputy Chief (Evaluations), Commonwealth Bureau
of
Roads, Melbourne.
121
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