7.4
Social Welfare Functions . . . . . . . . . . . . . . . . . . . . . . . . . . . 193
7.4.1
Simple Profit or Benefit-Cost Ratio Maximization . . 195
7.4.2
Profit Maximization with Inclusion of Secondary
Social Benefits and Costs . . . . . . . . . . . . . . . . . . . . 195
7.4.3
Profit Maximization with Constraints . . . . . . . . . . . 195
7.4.4
Vote Maximization . . . . . . . . . . . . . . . . . . . . . . . . 196
7.4.5
Democratic Strength of Preference . . . . . . . . . . . . . 196
7.5
Designing Measures of Effectiveness: Public Health . . . . . . . . 197
7.6
Allocation of a Scarce Resource Space for Cars . . . . . . . . . . . 199
7.6.1
By Congestion Pricing . . . . . . . . . . . . . . . . . . . . . . 199
7.6.2
By Rationing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199
7.6.3
By Money Pricing . . . . . . . . . . . . . . . . . . . . . . . . . 199
7.7
Engineering as Opposed to Construction . . . . . . . . . . . . . . . . 200
7.8
Social Aspects of Infrastructure . . . . . . . . . . . . . . . . . . . . . . . 202
7.8.1
Sustainable Knowledge Infrastructure . . . . . . . . . . . 202
7.8.2
Infrastructure as Stored Potential . . . . . . . . . . . . . . . 202
7.8.3
Water Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
7.8.4
Treating People Differently . . . . . . . . . . . . . . . . . . 205
7.8.5
Projects and Promises . . . . . . . . . . . . . . . . . . . . . . 206
7.8.6
Is Infrastructure ¼ Development? . . . . . . . . . . . . . . 208
7.8.7
Infrastructure as Country Icons . . . . . . . . . . . . . . . . 209
7.8.8
Aesthetics of Infrastructure . . . . . . . . . . . . . . . . . . . 212
7.9
From Inception to Oblivion . . . . . . . . . . . . . . . . . . . . . . . . . . 213
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
8
Analysis of Environmental Impacts of Infrastructure . . . . . . . . . . . 219
8.1
Economic Measurement of Environmental Impacts: Theory . . 220
8.2
Generally Applicable Techniques . . . . . . . . . . . . . . . . . . . . . 222
8.3
Using Market Prices to Value a Change in Production . . . . . . 223
8.3.1
Changes in Productivity . . . . . . . . . . . . . . . . . . . . . 224
8.3.2
Loss of Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . 225
8.3.3
Opportunity Cost . . . . . . . . . . . . . . . . . . . . . . . . . . 225
8.4
Using Market Prices to Value Costs . . . . . . . . . . . . . . . . . . . . 225
8.4.1
Cost-Effectiveness Analysis . . . . . . . . . . . . . . . . . . 226
8.4.2
Preventive Expenditures . . . . . . . . . . . . . . . . . . . . . 228
8.4.3
Choosing a Technique . . . . . . . . . . . . . . . . . . . . . . 229
8.5
Potentially Applicable Techniques . . . . . . . . . . . . . . . . . . . . . 229
8.6
Techniques Using Substitute Market Prices . . . . . . . . . . . . . . 229
8.6.1
Property Values . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
8.6.2
Other Land-Value Approaches . . . . . . . . . . . . . . . . 230
8.6.3
Wage Differentials . . . . . . . . . . . . . . . . . . . . . . . . . 230
8.6.4
Travel Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
8.6.5
Marketed Goods as Environmental Surrogates . . . . . 231
Contents
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