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Cost-Benefit Analysis, PDF eBook

Cost-Benefit Analysis PDF

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This Element on cost-benefit analysis provides a summary of recent theoretical and empirical developments and summarizes state-of-the-art stated-preference and revealed-preference valuation methods.

The Element discusses how to assess small (or marginal) as well as large (or non-marginal) projects that have a significant impact on prices and/or other economic variables.

It also discusses distortions like taxes, market power, and sticky prices.

In addition, risk/uncertainty is considered. A novel feature is the elaboration on flexible evaluation rules for reasonably small projects.

Conventional point-estimates of projects should be used with care, because they typically give biased results.

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