Wednesday, October 28, 2009

How Economic Benefit-Cost Analysis Figures in Political Benefit-Cost Analysis

1. How does the proposal fit with my priors?
2. "Just give me a number!" (from economic benefit-cost analysis)
3. Consider expected effect on contributions/budget.*
     a. increase = benefits
     b. decrease = costs
4.  Consider expected effects on votes.*
     a. increase = benefits
     b. decrease = costs
5. Weigh together (via some mysterious and uncertain calculus) results of steps 1., 3., and 4.
6. Net out total expected costs and benefits.
7. Make decision based on the net.

*Notice that in political benefit-cost analysis expected effects on contributions/budgets do not necessarily equate to effects on votes, reflecting the supposition that in some cases money may be more important than votes, and vice versa in other cases.

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