On a New Approach to Social Evaluations of Environmental Projects

10 Pages Posted: 5 Feb 2012

See all articles by Per-Olov Johansson

Per-Olov Johansson

Stockholm School of Economics

Bengt Kriström

SLU- Centre for Environmental and Resource Economics (CERE)

Date Written: February 3, 2012

Abstract

Conventional cost-benefit rules typically assume that the alternative to the project under evaluation is 'doing nothing' or 'business as usual'. In this note we contrast this approach to one where the alternative is to provide another environmental good or service. We show that this approach, which draw on methods like Habitat Equivalency Analysis and Resource Equivalency Analysis, imply that all cost and benefit items can be estimated using market prices. This is in sharp contrast to the conventional approach which typically require the use of controversial stated preference techniques to estimate the willingness to pay for non-market goods.

Keywords: cost-benefit analysis, habitat equivalency analysis, non-market goods, resource equivalency analysis, stated preference methods

JEL Classification: D61, H43, Q51, Q57

Suggested Citation

Johansson, Per-Olov and Kriström, Bengt, On a New Approach to Social Evaluations of Environmental Projects (February 3, 2012). CERE Working Paper, 2012:4, Available at SSRN: https://ssrn.com/abstract=1998685 or http://dx.doi.org/10.2139/ssrn.1998685

Per-Olov Johansson (Contact Author)

Stockholm School of Economics ( email )

P.O. Box 6501
Stockholm
SWEDEN
+46 8 736 92 82 (Phone)
+46 8 30 21 15 (Fax)

Bengt Kriström

SLU- Centre for Environmental and Resource Economics (CERE) ( email )

Umea, 901 83
Sweden
+46-(0)90-7865219 (Phone)

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