Abstract
Importance of flow effects generated in the process of constructing infrastructure has been stressed in cost benefit analysis. There are however some misleading discussions on the effects, particularly on accounting of tax revenue changes. This paper examines cancel out property of tax revenue changes in some typical situations in the framework of a Simple General Equilibrium Model and Benefit Incidence Table. Then, on the basis of the theoretical derivation of the effects. the paper proposes a very practical method for accounting prices including tax in cost benefit analysis.
