Working papers in Transport Economics,
CTS - Centre for Transport Studies Stockholm (KTH and VTI)

Abstract: We model and test the representativeness of environmental policy-making, as implied by cost-benefit analysis (CBA) results, in governmental agencies assuming that individual civil servants maximize their personal utility. Education may also influence civil servants’ behavior. The biologists in our sample have the highest valuation of environmental quality. We suspect that their training does not teach them about societal welfare maximization and that they consequently do not adjust their policy recommendation to CBA results, while the economists, who learn about welfare economics, do. The empirical results indicate that the economists adjust their private valuation of the environment by a factor giving a sufficient weight to the CBA results to make their average choice a cost-efficient one. Even the economists in our sample chose on average a policy that is costlier than the cost-efficient one yet clearly less expensive than the policy chosen by the biologists and social scientists.

Keywords: Biologists; Bureaucracy; Civil servants; Education; Economists; Environmental policy; Political Economics; Representative bureaucracy; Surveys; Use of cost-benefit analysis; Weighted welfare

JEL-codes: H23; H83; Q25; Q53; Q58

36 pages, October 8, 2013

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CTS2013-30.pdf  

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