Regional Welfare Weights in Investment Appraisal - The Case of India

Pareto welfare criterion based only on people’s willingness to pay for the project’s output is regarded by many as being a narrow interpretation of an improvement in social well-being. A broader opinion is that even though poorer individuals may be less able to pay for a particular benefit, they may obtain greater utility from it. In line with the broader opinion, this paper looks at regional welfare weights in India on the basis of a conventional consumption utility function which assumes diminishing marginal utility. Estimated parameters are; elasticity of marginal utility of consumption, and per capita national and regional incomes which are used in the calculation of welfare weights for 17 states of India.

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Journal of Regional Analysis and Policy, 32, 1
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 Record created 2017-04-01, last modified 2020-10-28

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