This paper demonstrates that Bishop's formulation deviates in a fundamental way from our model and, in so doing, Bishop has assumed the problem away. Bishop utilizes a utility function that is too general to discriminate the time pattern of consumption from that of production. Hence, the intertemporal nature of the goods that we analyzed cannot be captured by Bishop's representation. Furthermore, we show that current benefit cost methods that discount the benefit stream of a public asset are Pareto intertemporally inefficient.
ASJC Scopus subject areas
- Economics and Econometrics
- Management, Monitoring, Policy and Law