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2010

School of Education and Human Development at the University of Colorado Denver

Environmental Economics/Public Economics

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Full-Text Articles in Political Science

Benefit-Cost Analysis Of Environmental Projects: A Plethora Of Systematic Biases, Philip E. Graves Jan 2010

Benefit-Cost Analysis Of Environmental Projects: A Plethora Of Systematic Biases, Philip E. Graves

PHILIP E GRAVES

There are many reasons to suspect that benefit-cost analysis applied to environmental policies will result in policy decisions that will reject those environmental policies. The important question, of course, is whether those rejections are based on proper science. The present paper explores sources of bias in the methods used to evaluate environmental policy in the United States, although most of the arguments translate immediately to decision-making in other countries. There are some “big picture” considerations that have gone unrecognized, and there are numerous more minor, yet cumulatively important, technical details that point to potentially large biases against acceptance on benefit-cost ...