On values and their estimation

Whilst demands for benefit cost analysis (BCA) to be applied to a wide variety of policy decisions are growing, there remains a degree of dissatisfaction amongst policy makers, non‐economist specialists and some economists with its use. Part of that dissatisfaction arises because of a degree of confusion relating to what is meant by the term value as it is used in BCA. Furthermore, proponents of other techniques that have been suggested as substitutes for BCA are keen to cast doubts on the ability of BCA to perform its role in consolidating the disparate information relating to the outcomes of alternative policies. An attempt is made to clarify the notion of value as it is used in a variety of guises. These alternative notions are assessed in terms of their abilities to assist in policy formulation. Second, some of the alternative techniques are critiqued, with particular attention being paid to the use of the value concept. Concludes that clarity in the specification of the goals to which a specific concept of value is to be applied is vital. Different concepts relate to different goals and the application of the wrong concept to a goal could be costly. In a final section, the confusion that has arisen within the discipline regarding the concept of value that underpins some non‐market valuation techniques is explored.