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Distributional Weights in Benefit-Cost Analysis: Examples from Rwanda and Uganda

Charles B. Moss EMAIL logo and Andrew Schmitz

Abstract

The question of how to allocate scarce agricultural research and development dollars is significant for developing countries. Historically, benefit/cost analysis has been the standard for comparing the relative benefits of alternative investments. We examine the potential of shifting the implicit equal weights approach to benefit/cost analysis, as well as how a systematic variation in welfare weights may affect different groups important to policy makers. For example, in the case of Rwandan coffee, a shift in the welfare weights that would favor small coffee producers in Rwanda over foreign consumers of Rwandan coffee would increase the support for investments in small producer coffee projects. Generally, changes in welfare weights alter the ordering for selecting investments across alternative projects.

JEL Classification: Q16; O13

Corresponding author: Charles B. Moss, Food and Resource Economics Department, University of Florida, PO Box 110240, Gainesville, FL 32600-0240, USA, E-mail:

Funding source: USAID 98.001

Award Identifier / Grant number: 720-OAA-18-LA-00003

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Supplementary Material

The online version of this article offers supplementary material (https://doi.org/10.1515/jafio-2021-0003).


Received: 2021-02-02
Accepted: 2021-02-10
Published Online: 2021-02-25

© 2021 Walter de Gruyter GmbH, Berlin/Boston

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