To conduct a cost-benefit analysis for social policies related to physically or psychologically addictive goods such as tobacco or gambling, the authors propose an adjustment to consumer surplus, the difference between the maximum consumers will pay for a good and what they actually pay.
Cost-Benefit Analysis Involving Addictive Goods: Using Contingent Valuation to Estimate Willingness to Pay to Eliminate Addiction
- Volume or issue no.: La Follette School Working Paper No. 2007-019
- Author(s): David L. Weimer, Aidan Vining and Randall K. Thomas
- Link to publication: Download PDF