Cover; Half Title; Title Page; Copyright Page; Table of Contents; List of figures; List of tables; List of boxes; Preface; Acknowledgements; Abbreviations; Main notation; Part I Theory; 1 On social welfare; Overview; 1.1 The concept of social welfare; 1.2 The welfare assumptions behind GDP and NNP; 1.3 Individual and social welfare; 1.4 Determinants of individual welfare: goods; 1.5 Determinants of social welfare: individual utilities; 1.6 Sen's critique of individualistic SWF; 1.7 Paternalism and not (only) individualistic Social Welfare Functions; 1.8 Happiness economics. 1.9 'Positive' analysis1.10 Further reading; 1.11 Summary of Chapter 1; 2 The two fundamental theorems re-examined; Overview; 2.1 Theorems versus intuitions; 2.2 The Arrow-Debreu economy; 2.3 The axiomatic structure; 2.4 Consumers, producers and government: objectives and constraints; 2.5 The Walrasian equilibrium; 2.6 The two theorems without ideology; 2.7 The informative structure: Stiglitz's critique; 2.8 Critical analysis of the second theorem; 2.9 The government rediscovered in second-best economies; 2.10 Further reading; 2.11 Summary of Chapter 2. Appendix 2.1: Policies based on the Second Theorem:3 Shadow prices and the social planner; Overview; 3.1 Introductory remarks; 3.2 A model for project and policy evaluation; 3.3 A second-best economy in the DS frame; 3.4 Policy reforms and shadow prices; 3.5 Multi-government setting; 3.6 Why use shadow prices?; 3.7 Further reading; 3.8 Summary of Chapter 3; Appendix 3.1: Some results from Drèze and Stern (1987); Part II Empirics; 4 The social cost of goods; Overview; 4.1 Observed prices and financial analysis; 4.2 Accounting prices and economic analysis. 4.3 Empirical approaches for guessing accounting prices4.4 The border price rule for tradable goods; 4.5 The Standard Conversion Factor; 4.6 The long-run marginal cost; 4.7 Willingness-to-pay; 4.8 Further reading; 4.9 Summary of Chapter 4; Appendix 4.1: Financial analysis; Appendix 4.2: An example of financial and economic analysis; 5 The social cost of labour; Overview; 5.1 Earlier literature on the social opportunity cost of labour; 5.2 A conceptual model for the social cost of labour; 5.3 The shadow wage rate and labour market conditions. 5.4 Empirical estimation of shadow prices for EU regions5.5 Further reading; 5.6 Summary of Chapter 5; 6 The social cost of capital; Overview; 6.1 Rationale for discounting; 6.2 Estimating the social discount rate; 6.3 The social discount rate as a function of time; 6.4 Empirical estimates of the social discount rate; 6.5 The opportunity cost of public funds; 6.6 Further reading; 6.7 Summary of Chapter 6; 7 Welfare weights and distributional impacts; Overview; 7.1 Why are equity considerations needed in CBA?; 7.2 Deriving welfare weights; 7.3 Estimation of distributional weights.