A Three Objective Social Welfare Function for Cost-Benefit Analysis
Applied Economics, Volume 16, 1984 - Issue 3
Posted: 22 Sep 2018
Date Written: 1984
This article presents a set of policy decisions where a three-objective social welfare function (SWF) was used. In addition to efficiency and distributional elements there is a third constituent: the ‘numbers effect’. The cost–benefit criterion that results depends on the numbers who are willing and able to pay for the public project. As a philosophy, it follows Bentham in requiring that expenditure decisions provide the ‘greatest good for the greatest number’.
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