Benefit-Cost Analysis

Benefit-cost (B/C) analysis must take into account the distributional effects from a policy or program change. To highlight this, we focus on the theory of production quota buyouts within a B/C framework. As an empirical application, we provide evidence on the distributional effects of the U.S. government buyout of the peanut program in 2002, where production quotas were key ingredients. Two approaches to producer compensation under the buyout are discussed: (1) value of quota approach and (2) gains from quota approach. In the peanut quota program buyout, the U.S. government chose the value of quota approach. Both consumers and producers were made better off as a result of the buyout, and there was a net gain in efficiency. If the government had chosen the gains from quota approach instead, government expenditures and producer gains would have been lower, and consumer benefits would have remained unchanged. Under either approach, the B/C ratios calculated for the government quota buyout are almost identical

Business · Compensation (psychology · Economics · Government (linguistics · Industrial organization · Leveraged buyout · Microeconomics · Private equity · Production (economics · Public economics · Statistics · Value (mathematics · Economic Growth and Productivity · Efficiency Analysis Using DEA · Fiscal Policy and Economic Growth · Mathematics · Finance

• Benefit-cost analysis

  Open Access•Andrew Schmitz, Dwayne J Haynes et al.•Journal of Benefit-Cost Analysis•2013

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• Milked and Feathered

  Ryan Cardwell, Claire Lawley et al.•Canadian Public Policy•2015

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• Incorporating Distributional Issues into Benefit Cost Analysis

  Open Access•John B Loomis•Journal of Benefit-Cost Analysis•2011

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