CBA Flashcards
Legislation
Insentives to do good are usually more efficient cheaper and easier to manage than prohebition/fining for doing bad.
“Goal”
“Economic allocation in society”
“Scope”
“Net benefit of project or activity”
“Objects”
“Project or activity”
“Sources”
“Mainly local”
“Safegurad subject”
“Human health, ecosystems, resources”
“Formal recognition”
“Used by governments”
CBA methodology
Identification of problem Formulation of problem Generation of alternative options Assessment of options Selection of prefered option Implementation Evaluation
Economic good vs free good
Economic good is a good that is scarce
Free good is a good is available without limits: air, sea water etc.
Market
Where supply and demand of goods meet and transactions take place.
Measure in economics
The price that someone is willing to pay for the fulfillment or satisfaction of their desire/need.
Pareto optimality (and improvement)
As long as some people can get more without anyone getting less, it’s a Pareto improvement.
Optimal when most of the resources are used (maximum average) but not when it is most equal.
Discounting
Value of money over time
Sensitivity analysis
Standard deviation? (Best and worst scenario)
Kaldor-Hicks Potential Pareto improvement
Can the winners compensate the losers so that everyone is stil better off in the end? Ex. tax.
Someone can be worse off in reality, but most people are hopefully compensated.
