Shadow Prices for Project Appraisal: Theory and Practice

Capitalizing on the extensive experience of the author in estimating shadow prices, this text forges a bridge between theory and practice, explaining what shadow (or accounting) prices are, how they are used, and how they can be estimated. Starting from the basic principles of applied welfare economics, this book provides a step-by-step derivation of those formulas more frequently utilized in estimating shadow prices. The preparation and use of input-output techniques are examines in detail, and different estimation approaches and updating procedures are presented. Finally, a detailed case study of shadow prices for Colombia illustrates their practical application. The volume is aimed at students and teachers interested in cost-benefit analysis, and in shadow prices as a specialized field of applied welfare economics. In addition, it should be a useful source for applied economists and practitioners interested in calculating shadow prices.