The Economics of Participatory Value Evaluation
Tinbergen Institute Discussion Paper 2019-008/VIII
38 Pages Posted: 4 Feb 2019 Last revised: 22 Feb 2019
Date Written: January 27, 2019
This paper develops a novel approach to the economic evaluation of public policies: participatory value evaluation (PVE). PVE involves citizens directly in decisions of the government, taking into account governmental and individual budget constraints. Citizens receive reliable information on social impacts and can choose the best portfolio of projects according to their social preferences. This paper develops the economic and econometric theoretical framework for fixed budget and flexible budget PVE experiments which allows us to directly measure the change in social welfare for investments in water infrastructure in The Netherlands.
Keywords: participatory value evaluation, cost-benefit assessment, welfare analysis, discrete-continuous choice models
JEL Classification: H43, C35, C91, D63, D71
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