This paper discusses Amartya Sen’s position on Cost-Benefit Analysis and on incommensurability. Issues concerning “Market-Centered Valuation” (Reliance on Willingness to Pay, Sufficiency of Potential Compensation, Disregard of Social Choice Options) are those where Sen sees the biggest problems of incommensurability. About “Reliance on Willingness to Pay” Sen says that use of willingness to pay in valuations based on a “market analogy” neglects distributional issues and the requirements of a social choice formulation of the problem. Sen then criticizes the “Sufficiency of Potential Compensation”, saying that the compensation tests are either redundant or unconvincing uninserted from a broader framework incorporating distributional values. The problem is how does society determine that broader framework. Sen finally refers to the “Disregard of Social Choice Options”. Referring particularly to environmental issues, he states that the philosophy behind contingent valuation seems to lie in the idea that an environmental good can be seen in essentially the same way as a normal private commodity that we purchase and consume. The market analogy is considered by Sen as “particularly deceptive”, since the market does not provide specified alternative social states to the individuals to choose from.

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