ECON 370 Lecture 6: 006secondary.article
Document Summary
Valuing impacts in secondary markets: during the last few lectures we discussed how to determine. The social value of project outputs when those outputs are traded in existing markets. A new regulation that increases the cost of producing natural gas (ng) would increase the price of ng, which would increase the demand for crude oil (ng and crude oil are substitutes) A new tariff on imports of soybeans would increase price of soybeans, which would increase increase the demand for corn (soybeans and corn are substitutes: correctly accounting for secondary market effects in cba depends on. How the welfare change in the primary market has been calculated. Whether or not the secondary market is ef cient; ie, undistorted. Whether or not the primary market impact causes the price in the secondary market to change s. Remark: we will assume that welfare changes in primary markets are included in the cba and have been calculated appropriately.
