ABSTRACT
Many private and public sector decisions influence the well-being of the decision maker or others far into the future. A student’s decision to attend college will affect her income and lifestyle for the rest of her life. A business’s decision to build a factory or store will produce benefits and costs for at least as long as the facility is in use. Government investments in highways, education programs, nuclear waste storage, or other long-run policies also involve benefits and costs which extend over many years or even many generations. Analyzing a private or public sector decision with long-run benefits and costs is more complex and requires more information than a decision with only short-term consequences. Yet the goal of the decision-making process is the same. Theoretically, the rational individual or group will choose the course of action that creates the greatest positive difference between benefits and costs, subject to whatever constraints they face and using as much information as they can reasonably attain and process.
