Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2023-03-03
Number: 23-008/VIII
Author-Name: Paul Koster
Author-Workplace-Name: Vrije Universiteit Amsterdam 
Title: Counting what counts: Moral considerations and market surplus
Abstract: Public benefit-cost analysis of market policies often relies on 
a particular definition of market surplus that adds up consumer and producer 
surplus and external costs. This paper provides an overview of conceptual 
strategies to deal with moral considerations and then develops an adjusted
market surplus function that is able to deal with heterogeneous normative 
perspectives. In a stylised model, new expressions for first-best Pigouvian 
taxes are developed that depend on moral considerations. A novel moral rule-of-half approximation is provided for the potential surplus gains of taxation or 
behavioural change.
Classification-JEL: D04, D61, D62, D63, B59, A13
Keywords: Welfare economics, Moral considerations, Normative 
Pluralism, Ethics and market value, Benefit-cost analysis, Pigouvian 
taxation.
File-URL: https://papers.tinbergen.nl/23008.pdf
File-Format: application/pdf
File-Size: 605.422 bytes
Handle: RePEc:tin:wpaper:20230008