SEMAINE D'ÉTUDE SUR LE ROLE DE L ANALYSE ECONOMETRIOUE ETC.
213
of committees or of local administrators of public aid on what you
have and how vou should spend the income:
DORFMAN
The two cases that I had in mind in introducing that motiva-
tion were public housing and education. In both cases it is ge-
nerally felt that there are very important external economies of
consumption so that not only does the public want to provide those
services to the lower income groups, but also it is the public will
that the beneficiaries of such subsidies spend them on the goods
that they are intended for and on no others. This is candidly a
form of sumptuary legislation in which the community is consciously
and explicitly substituting its judgment for the preferences of some
of its consumers because it is felt that the community as a whole
will benefit from the types of consumption that are being subsidized
KOOPMANS
[ should first confess that I have to apologize for having read
only one half of the paper. However from the beautiful exposition
that Mr. DorFMAN gave, I understood that his discussion was con-
cerned with evaluating specific projects, one by one, so to say,
or three at a time, and he described TINBERGEN’S proposal of an
iterative procedure by which to get the optimizing quantities and
their shadow prices in line. My question is, how does the rate of
return itself, or if a different rate is applied to different parts of the
future, how does the sequence of rates of return applicable to indi-
vidual one-year periods in the future get determined? Is this also
part of the iterative process of dialogue between the economic plan-
ner and the political decision maker? If so, is that problem not of
a higher order of complexity in the data requirements in that really
all relevant projects, including those likely to be forthcoming from
the private sector of the economy, enter also?
A
Dorfman - pag. 2;