Distributional Weights in Benefit-Cost Analysis: Examples from Rwanda and Uganda

Charles Moss and Schmitz Andrew ()
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Schmitz Andrew: University of Florida, Gainesville, FL, USA

Journal of Agricultural & Food Industrial Organization, 2021, vol. 19, issue 1, 15-24

Abstract: The question of how to allocate scarce agricultural research and development dollars is significant for developing countries. Historically, benefit/cost analysis has been the standard for comparing the relative benefits of alternative investments. We examine the potential of shifting the implicit equal weights approach to benefit/cost analysis, as well as how a systematic variation in welfare weights may affect different groups important to policy makers. For example, in the case of Rwandan coffee, a shift in the welfare weights that would favor small coffee producers in Rwanda over foreign consumers of Rwandan coffee would increase the support for investments in small producer coffee projects. Generally, changes in welfare weights alter the ordering for selecting investments across alternative projects.

Keywords: benefit/cost analysis; investment in agricultural research and development; welfare weights (search for similar items in EconPapers)
JEL-codes: O13 Q16 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1515/jafio-2021-0003

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