A critical analysis of public policy decisions requires a far greater depth of knowledge than can be received from news reports and political speeches. Issues such as how best to reduce traffic congestion, reduce acid rain, improve airline safety or develop a parcel of land are better understood by organizing, measuring and weighing the effects of alternative policies. The Economic Analysis of Public Policy is the ideal introduction to benefit-cost analysis, the economics of efficiency, risk analysis and present value, and is suitable for those with only a modest background in mathematics and economics. This second edition of the book has been rigorously updated throughout, in terms of examples and data references, issues covered, and layout and pedagogical features. The new edition contains extra material on loss aversion, global warming, technology, and US health care reform, as well as a wider range of international examples. In addition to a new, clearer layout, students will also benefit from the new companion website, which will include additional resources such as end of chapter questions, critical thinking exercises and further reading.