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Cost-benefit analysis appears to be a neutral, lon rational, and technical decision-making strategy, but it can be controversial. People do not necessar-,ily agree on what are positive and negative conse- u&i i quences. For example, I may see widening a nearby yroad as a benefit because it will let me travel to work much more rapidly. But the homeowner who lives along the road may see the same action as a cost because it will remove some of his or her lot and he or she will then experience more noise, pollution, and congestion.
There are two ways to assign monetary values to costs and benefits. Contingency evaluation asks people how much something is worth to them. For example, I may want to estimate the cost of air pollution that has health consequences for the average person. I might ask people: How much is it worth to you not to cough a lot and miss work two days a year due to asthma? If the average value assigned by people is $150 in a town of 20,000, then the contingency evaluation or subjective benefit of health would be $150 x 20,000 per year = $3 million. I might balance this against higher profits for a company or more jobs created by allowing the'pollution. A problem with this estimation is that people rarely give accurate estimates and different people may assign very different values. To an impoverished person, coughing and missing work may be worth S500, but for a wealthy person, it may be $ 10,000. In this example, polluting companies would tend to move to towns with low-income people, worsening their living conditions.
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