Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: Econometric analysis for assessing the efficacy of public investment / R. Dorman, Harvard University - Cambridge, Mass. - U.S.A.

Collection:: Economics Books

08 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 Thus the shadow prices are an instrument for appraising the wisdom of any specification of targets. They disclose one of the major implications of such a specification: the marginal cost of achieving each target. The appropriateness of the assignment of targets can be debated in the light of this infor- mation, which is a fruitful improvement over current practice which often requires responsible officials to make policy de- cisions at the level of design specification (the x; in our no- tation). Judgements about the magnitudes of incommensur- ables, like the diverse objectives of a public investment under- ‘aking, can be made in a more than off-hand way only when responsible officials confront the trade-offs implicit in their decision. The process here proposed begins with any a priori plausible selection of target levels, which are revised and refined as the marginal costs of achieving them become clearer. This pro- cedure envisages that the design and its objectives will evolve together: the design following pretty mechanically from the objectives; the objectives following from a critical appraisal of the design. This same model and approach can be formulated in a somewhat different, and instructive, way. The construction costs, which are to be minimized, are a function of the design specifications, but the outputs depend on the operating policy. The role of the design, as far as outputs are concerned, is largely to make desirable operating policies feasible. For instance, one cannot have a policy that calls for dispatching 100,000 kw. of electric power from a plant whose installed capacity is much below that figure. Therefore, it generally (not quite always) fits the structure of the problem best to regard output in each dimension as a function of operating policy alone, and the design as setting limits to the choice of operating policy. The problem then takes this form: Choose design spe- cifications to minimize c(x,, ..., x,) subject to the constraints "37 Dorfman - pag. 12

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