ECON361 Chapter Notes - Chapter 19: Demand Curve, Upper And Lower Bounds, Marginal Utility
9 Aug 2016
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Purpose: to consider the rationale for, and review methods of, distributional weighting in cba. Therefore, analysts often break benefits and costs into separate categories of people. Individual are categorized into groups differently depending on the specific policy (e. g. , consumers vs. producers vs. taxpayers or high-income (hi) persons vs. low-income (li) persons). However, the distribution of benefits and costs is often important to decision makers. The rationale suggested by economists for distributional weighting is mostly limited to situations where li persons are helped or hurt by a program more than other income groups. H criterion, many income transfer programs that redistribute from hi persons to li persons would not pass the k-h test. Such programs can only be justified if the benefits to the li persons receive a greater weight. The case for treating li and hi groups differently in cba.
