Chapter 4: Economic Efficiency and Cost Benefit Analysis. Economic Efficiency Cost Benefit Analysis. Economic Efficiency.
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Cost Benefit Analysis
Present value equation (4.1)Q1: should those living in the present so disregard future generation?
Q2: market rate of interest rate=social discount rate?
Q3: Inequalities in discounting rate?
where quality weight (q) denotes range from 1 (perfect health ) to 0 (death) =>individuals’ preference for health F is the probability of survival;
d is discount rate