Welfare-Reducing Growth and Cost-Benefit Analysis: Essay in Memory of E.J. MISHAN

Abstract

Mishan’s emphasis on the costs of economic growth half a century ago is becoming more important in this era of environmental concerns. More recently, another possible source of immiserizing growth is the one-child policy (recently relaxed) of China. This resulted in a biased sex-ratio and higher competition to earn incomes (to increase the probability of getting a wife), resulting in positive effects on GDP but negative effects on welfare. The implications of welfare-reducing growth for cost-benefit analysis and the legalization of prostitution are also discussed.