Description
Return socialCost = privateCost+externalCost and gap = externalCost on one matching monetary basis.
Economic value comparisons need a common currency, period, quantity basis and definition of the relevant benefit or cost. A purchasing-power ratio, surplus segment or external-cost identity is only a contribution to a broader valuation.
Return socialCost = privateCost+externalCost and gap = externalCost on one matching monetary basis.
When to use this tool
Use External Cost Private Social Gap when checking a declared price, benefit or cost comparison.
How to use the tool and how it works
- Enter privateCost, externalCost. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read socialCost, gap. Use the output convention below.
Return socialCost = privateCost+externalCost and gap = externalCost on one matching monetary basis.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| privateCost | Private Cost | Required. Finite number. |
| externalCost | External Cost | Required. Finite number. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| socialCost | Social Cost | Required. Finite number. |
| gap | Signed difference from the stated reference, using compatible units. | Required. Finite number. |
{
"input": {
"privateCost": 20,
"externalCost": 5
},
"output": {
"socialCost": 25,
"gap": 5
}
}Limitations and assumptions
- Signed cost terms are accepted. The external component is supplied rather than measured, and the identity does not establish a complete welfare or policy assessment.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use appropriate empirical valuation and full system boundaries when assessing welfare, living standards or individual choices.
References
Similar or alternative tools
- Consumer Surplus One Linear Segment
surplus = quantity*((firstWillingness+lastWillingness)/2-price).
- Reservation Price Surplus One Unit
Return surplus = reservationPrice-actualPrice and participates when reservationPrice >= actualPrice.