Is risk-neutrality an appropriate assumption for benefit-cost analysis? Why or why not? Does it seem more appropriate

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Is risk-neutrality an appropriate assumption for benefit-cost analysis? Why or why not? Does it seem more appropriate for some environmental problems than others? If so, which ones? If you were evaluating the desirability of locating a hazardous waste incinerator in a particular town, would the Arrow–Lind rationale for risk-neutrality be appropriate? Why or why not?

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Ali Khawaja

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