Selection Criteria:
Pareto optimal or Pareto improvement: very conservative, criterion requires that in any public investment no
one is worse off and at least someone is
better off.
Net welfare improvement: merely requires that total (present
value) benefits exceed
total (present value) costs. Total
improvement of gainers outweighs the
combined setback of the losers, or that B/C ratio >1.
Pareto improvement is a non-starter,
while net welfare improvement RARELY
actually makes the losers WHOLE except in theory.