Shadow Pricing Rules for Partially Traded Goods

Abstract

This paper shows how to shadow price partially traded goods following the standard rules of cost-benefit analysis, i.e. identifying the individuals affected, measuring their corresponding compensating variations, and aggregating those measures according to a distributional value judgement. The analysis is conducted in a partial equilibrium framework, allowing for direct operational application.accounting prices, shadow prices, shadow pricing, partially traded, traded goods, cost-benefit analysis; project appraisal