Saturday 25 April 2009

Sunk costs and the Wellington city council

This from Wellington city councillor Andy Foster in an article in the Dominion Post,
One thing the council is clear on is that we don't want Rongotai to develop into another town centre. The Kilbirnie town centre is within walking distance, and the council has invested much public money in facilities such as the regional aquatic centre, community centre, library, and council housing to serve the eastern and southern suburbs
What is the secondhand market for 'regional aquatic centres', 'community centres' and libraries like? Much of these "investments" have a non-recoverable look to them and insofar as they are sunk costs why is the councillor getting worked up about them? Sunk costs are irrelevant to decision making.

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