The Law And Economics Of Cannibalism: The Limits Of Valuation Criteria And Benefit-Cost Analysis

Abstract

All general rules for behavior or valuation and for law itself break down under some circumstances. The law struggles with this sort of issue in the law of necessity, in assigning rights, in valuation, in considering burdens of proof with incomplete information, and in developing common law. This is no less true of cost benefit analysis, (CBA) or benefit-cost analysis (BCA), which depend on the law for definitions of rights. Economics and economists have long been extensively faulted for their treatment of values and valuation. These criticisms usually suggest no alternatives, though voting is sometimes mentioned. The point of this paper is that there is no perfect criterion for valuation but that some are better than others, and that a sophisticated benefit-cost analysis is often the best or is at least a reasonable or possible approach even under conditions not particularly favorable to its use.