BASIS FOR EVALUATION OF SOCIAL PROJECTS
Any definition of social or economic Assessment Project for the impact of a project or policy on the country's welfare. But to refer to national welfare, it is essential from a welfare analysis of an individual, then seek to define welfare of different individuals within the national community.
economic theory assumes that individuals have preferences for consumption goods and / or services and it is accepted that between higher consumption possibilities have, the higher your comfort level.
In the conventional theory that is handled frequently refers to "utility" as being synonymous, then the terms "welfare", "utility" or "satisfied" they are used interchangeably as synonymous.
To understand the rationale of economic evaluation of projects is necessary to return to the definition of economics. Economics is the science of how nations can optimize the allocation of its resources to meet their growing needs. As such, the economy is not limited to an analysis of financial earnings, but incorporates all the elements that lead to the satisfaction of needs.
Thus, the economic and social assessment (also known as cost - benefit analysis), the economist is to analyze projects and policies in order to allocate resources in such a way that is most beneficial to the national population.
consumer theory considers that consumer preferences for a quantity of goods q = (q1, q2 ..... qn) can be represented by a continuous function that is called "utility function" that function represents consumer behavior and is expressed as:
Where:
Set Q = Consumer
R = Real Numbers
is clear that if
q and is preferable to r then
programmatic level is possible, represent the preferences of a given individual. The set of all combinations of costs that the consumer considers indifferent to each other and provide the same level of utility constant, is called "curve Indifference ".
Table 1
Indifference Curve
Note that from above is the indifference curve, the greater the level of family welfare.
