Ezra Mishan, who has died aged 96, was one of the first economists to argue that there are significant downsides to economic growth. His book The Costs of Economic Growth (1966) maintained that increases in GDP and real income were compatible with declines in happiness and social welfare. In fact, he found that growth often brought less of the non-material things that make us happy: peace of mind, space, greenery and clean air, for example. More controversially, Mishan argued that growth led to more hedonism and a permissive society, which he saw as detrimental to welfare.
His thesis preceded the rise of the environmental movement, and remains persuasive and relevant to the realities of the 21st century, when strong economic growth is often associated with environmental degradation. Much of Mishan's writing focused on what economists called negative "externalities", the side effects of economic transactions. The parties involved in an exchange may inadvertently create costs for others not connected with it.
In 1971, Mishan produced his textbook Cost-Benefit Analysis. It is still in use around the world, and for the fifth edition in 2007 I joined him as co-author. Governments in both the developed and the developing world use the technique to make informed decisions in areas ranging from infrastructure development to health and education. At worldwide summits, international lending agencies also require some form of cost-benefit analysis in approving projects from developing countries.
Mishan's work on the statistical valuation of human life also made an impact. His paper The Evaluation of Life and Limb (1971) set out the argument that policymakers could assess the benefits of a particular measure by weighing its cost against how much it would reduce the risk of death. Such studies deriving the value of human life from people's willingness to pay - on the basis, for example, that an expressed readiness to pay £100 to reduce the risk of death by 10% values that individual's statistical life at £1,000 - are widely used in public project evaluations. These findings are crucial to public-sector investments in health, as well as in transport projects.
He also wrote on pornography, psychedelic drugs and the social ills brought about by technological growth. With all of these contributions he gave new relevance, and many new applications, to the field of welfare economics.
Perhaps surprisingly, Mishan was a research graduate of the University of Chicago, one of the world's most market-oriented departments. He was always circumspect about rightist, non-interventionist prescriptions on the economy and governance, and believed that there had to be checks and balances, and the correct amount of government intervention. His writings often remind readers of significant market failures resulting in welfare losses. In addition to the social malaise that may accompany a freely and seemingly unregulated competitive market system, Mishan also questioned the effectiveness of market-derived solutions in the modern world of rapidly changing technology.
He was born in Manchester, the second of five children of David, a textile importer from Cairo who had moved to Britain during the first world war, and his wife, Freda. He went to Manchester Grammar school, then to Salford Technical College to do a City & Guilds qualification in textile technology. After second world war service in the RAF, he gained a degree in economics at Manchester University (1946), then went on to the London School of Economics (LSE) for two years, and subsequently to Chicago to do his PhD under the supervision of Milton Friedman, achieving his doctorate in 1951.
He worked first as a lecturer, then a professor, at the LSE (1956-77), and later took up positions in a number of American universities, retiring in 1983. He continued to write until 2010, his work appearing in newspapers and magazines in the UK and US.
In 1951, Mishan married Ray (Rayzel) Blesofsky. She died in 2008. He is survived by four children, David, Freda, Joseph and Rachel, seven grandchildren and four great-grandchildren.
The writer is professor of environmental economics and head of economics at Nanyang Technological University.
This piece first appeared in The Guardian on 6 November 2014.