@article{Beare:124232,
      recid = {124232},
      author = {Beare, Stephen and Chambers, Raymond},
      title = {Fiducial cost-benefit analysis research: with an  application to weather modification},
      address = {2012},
      number = {423-2016-27024},
      pages = {20},
      year = {2012},
      abstract = {Environmental intervention is often seen as being high  risk and high return. Traditional scientific
hypothesis  testing provides limited guidance to policy makers unless  there is a high level of
certainty in the supporting  scientific evidence. Traditional cost-benefit analysis  under uncertainty
has shortcomings when considering  high-risk investment, largely due to the choice of how  to
discount uncertainty outcomes. A corollary is that  traditional cost-benefit analysis does not place a
value on  increased certainty, an important outcome of successful  scientific research. A fiducial costbenefit
methodology is  presented in this paper, which integrates hypothesis  testing and traditional
cost-benefit analysis. The fiducial  approach is one way of objectively placing a value on  changes in
the level of uncertainty that does not depend on  an assumption about a decision maker's attitudes
towards  variability in returns. This has two important  implications. First, there is a level of
uncertainty at  which we would reject an investment with a positive  expected net rate of return on
the basis that the  uncertainty associated with the outcome is too great.  Second, it is possible to value
a program of research that  reduces the uncertainty about a critical decision  parameter. An example
based on data from a weather  modification experiment conducted in South Australia is  presented.
The approach is the generalised using more  traditional statistical methodology.},
      url = {http://ageconsearch.umn.edu/record/124232},
      doi = {https://doi.org/10.22004/ag.econ.124232},
}