Why is risk-neutrality an appropriate assumption


Problem

Is risk-neutrality an appropriate assumption for benefit-cost analysis? Why or why not? Does it seem more appropriate for some environmental problems than others? If so, which ones? If you were evaluating the desirability of locating a hazardous waste incinerator in a particular town, would the Arrow-Lind rationale for risk-neutrality be appropriate? Why or why not?

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Microeconomics: Why is risk-neutrality an appropriate assumption
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