ABSTRACT
In making an evaluation, the instinct of economists is to draw the information they need from the market. This chapter explains the thinking that supports this instinct at a general level. The market—specifically prices—provides with information about the values people attach to different commodities. Commodities typically have positive own interest rates. That is to say, future commodities are typically cheaper in the present than present commodities. Future commodities are generally cheaper than present a commodity which implies that most people value future commodities less than present ones. Within the market price method of evaluation, there are some good grounds for discounting future commodities. The method itself has its attractions, and it is much more practical than the pure method. But there are also some sound objections to the market price method. The chapter describes how the prices of commodities can be used in cost-benefit analysis.
