Incorporating Distributional Issues into Benefit Cost Analysis
Why, How, and Two Empirical Examples Using Non-market Valuation
Bibliographic Data
| ID | 13037258 |
|---|---|
| Authors | John B Loomis (Colorado State University, corresponding author) |
| Year | 2011 |
| Volume | 2 |
| Issue | 1 |
| Pages | 1-24 |
| Publication date | 2011-01-03 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Benefit-Cost Analysis (JOURNAL) |
| Journal identifiers | ISSN: 2152-2812 • E-ISSN: 2194-5888 |
| Publisher | Cambridge University Press (CUP) (PUBLISHER) |
| DOI | 10.2202/2152-2812.1044 |
| OpenAlex | W2159651478 |
| Language | EN |
| Citations received | 10 |
| References cited | 22 |
This article reviews the rationale for and various approaches used by economists to incorporate distributional consequences of projects or policies into benefit-cost analyses. Approaches reviewed include distributional weights and metrics based on the Lorenz curve. Analysis of distributional issues in partial equilibrium and general equilibrium settings are briefly reviewed. We present an empirical demonstration of how the contingent valuation method (CVM) and hedonic property methods (HPM) can be used to quantify how non-market environmental benefits are distributed by income and ethnicity. Using CVM, the distribution of non-market benefits can be cross-tabbed with respondent demographics, so that a variety of “distributions” of benefits by relevant demographic groups can be calculated. Using the HPM, the analyst can statistically test to see if the implicit price gradient varies with differences in income and ethnicity. In our empirical example, we find that ethnicity and income interaction terms on the implicit price gradient are statistically significant suggesting differential effects of National Forest fire suppression policies on Hispanics and low income households
Actuarial science · Contingent valuation · Demographics · Distribution (mathematics · Econometrics · Economics · Empirical research · Ethnic group · Microeconomics · Public economics · Respondent · Statistics · Valuation (finance · Willingness to pay · Climate Change Policy and Economics · Economic and Environmental Valuation · Fiscal Policy and Economic Growth · Mathematics
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| Citations per year | 0.67 |
|---|---|
| Citation span | 2011 - 2025 (15) |
| Highly cited | No |