Shadow prices, consistency and the value of life

This paper examines the consequences of inconsistent shadow pricing. The principal example of such inconsistency is the value of life/safety. Second-best shadow pricing policy is shown to depend upon how public sector budgets are allocated and the principle that public sector decision-makers should...

Full description

Saved in:
Bibliographic Details
Published in:Journal of public economics 1985-07, Vol.27 (2), p.177-193
Main Author: Dobbs, Ian M.
Format: Article
Language:English
Subjects:
Budgeting
Consistency
Decision making
Economic theory
Life
Market economies
Mathematical models
Public sector
Shadow prices
Value
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper examines the consequences of inconsistent shadow pricing. The principal example of such inconsistency is the value of life/safety. Second-best shadow pricing policy is shown to depend upon how public sector budgets are allocated and the principle that public sector decision-makers should agree to a consistent shadow price is shown to require information unlikely to be available. A weaker consistency principle requiring minimal information is then developed.
ISSN:0047-2727
1879-2316
DOI:10.1016/0047-2727(85)90045-3