Sunday, February 27, 2011

One example of Cost and Benefit Analysis

The following is a case of cost and benefit analysis for smoking from the lecture of Justice by Michael Sandel.

Cost: Increased health care costs

Benefits;

 - Tax revenue from cigarette sales
 - From early deaths
   -> Health care savings
   -> Pension savings
   -> Savings in housing costs

Net gain if citizens smoke: $ 147 million

Savings from premature deaths due to smoking: $ 1,227 per person

Is the calculation right? In terms of utilitarinism , what is wrong? 

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