| Abstract: | ABSTRACT. Society has long sought to maximize the welfare of its members by allocating its limited resources so as to provide maximum satisfaction. As long as all of the values that society gains or loses are measured in the market place in terms of price, the process of maximizing through economic models is relatively straightforward. In fact, however, the total value that society receives from the use of its resources is not completely measured through the private market transactions. There are some values created which are external to the market system. The resulting underinvestment in natural resources by the private sector necessitates the entry of the public sector. The presence of intangible benefits and intangible costs has long been recognized, but completely satisfactory methods for including these in the quantitative analysis of benefit-cost have not been developed. Some progress has been made in including recreational values in project analysis via the expenditures method, the Gross National Product method, consumer surplus method, cost method, market value method, and monopoly and discriminating monopoly methods, but little has been done in the area of aesthetic values. Techniques for including such values in project evaluation need to be further researched. Tradeoff models developed by market researchers, the advertising industry, social psychologists and sociologists may have some applicability. Methodology for including proposed multiple objective functions in project analysis is also a critical need. |
