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Consumer Benefits of Infrastructure Services

Carmit Schwartz, Walter Diewert () and Kevin Fox ()
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Carmit Schwartz: School of Economics, Australian School of Business, the University of New South Wales

No 2014-17, Discussion Papers from School of Economics, The University of New South Wales

Abstract: This paper provides methodologies for evaluating consumer benefits of infrastructure services using potentially observable information. We define benefit measures for consumers and, using general principles from the index number literature, derive alternative first and second order approximations to these measures under the assumption of fixed prices for market goods and services. We then describe how the benefit measures and their associatedapproximations can be used in quantifying the economic benefits when prices are allowed to change endogenously as the provision of infrastructure services changes. In addition, under quite unrestrictive assumptions, a measure of welfare change based only on potentially observable data is derived.

Keywords: Consumer benefits; infrastructure services; first order approximation; second order approximation; exible functional forms; index number theory (search for similar items in EconPapers)
JEL-codes: C43 D61 H41 H43 H54 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2014-03
New Economics Papers: this item is included in nep-ger
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