Public Economics - Cost-benefit Analysis

Cost-benefit Analysis

While the origins of cost-benefit analysis can be traced back to Jules Dupuit's classic article "On the Measurement of the Utility of Public Works" (1844), much of the subsequent scholarly development occurred in the United States and arose from the challenges of water-resource development. In 1950, the U.S. Federal Interagency River Basin Committee’s Subcommittee on Benefits and Costs published a report entitled, Proposed Practices for Economic Analysis of River Basin Projects (also known as the Green Book), which became noteworthy for bringing in the language of welfare economics. In 1958, Otto Eckstein published Water-Resource Development: The Economics of Project Evaluation, and Roland McKean published his Efficiency in Government Through Systems Analysis: With Emphasis on Water Resources Development. The latter book is also considered a classic in the field of operations research. In subsequent years, several other important works appeared: Jack Hirshleifer, James DeHaven, and Jerome W. Milliman published a volume entitled Water Supply: Economics, Technology, and Policy (1960); and a group of Harvard scholars including Robert Dorfman, Stephen Marglin, and others published Design of Water-Resource Systems: New Techniques for Relating Economic Objectives, Engineering Analysis, and Governmental Planning (1962).