On the Differences Between the Commercial and Economic Profitability of a Project

Date
1990-02-01
Authors
Van de Wetering, H. Ike
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Economics
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Abstract

The economic profitability of a project is derived from it's commercial profitability by making two adjustments. First, an adjustment needs to be made for the change in.the sum of consumers' surplus arid factor rents. Second, an adjustment has to be made for the change in tax revenues and subsidies. Conventional practice ignores the former adjustment and mistakenly asstimes that the taxes or subsidies paid by the project

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