Emphasizing Distributional Impacts in Teaching Solutions to Market Failures

Sarah L. Stafford

International Review of Environmental and Resource Economics, 2021, vol. 15, issue 3, 175-202

Abstract: This paper argues for incorporating distributional impacts into research and classroom discussions that focus on potential solutions to market failures. Many economists were taught to focus on the efficiency associated with such solutions and to assume that other means would be used to achieve the appropriate distribution of wealth within an economy. The paper briefly enumerates both theoretical and practical reasons why emphasizing distributional impacts is important. The paper offers a number of methods that can be used to identify distributional impacts in applied research such as Kaldor–Hick Tableaus, Lorenz Curves, Gini Coefficients, and weighted benefit–cost analysis and provides sample assignments that can be used in a wide range of classes.

Keywords: Equity; benefit-cost analysis; Kaldor-Hicks Tableau; Lorenz Curve; intergenerational analysis (search for similar items in EconPapers)
JEL-codes: D31 D61 D63 H23 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:now:jirere:101.00000141

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