scholarly journals A Simple GDP-based Model for Public Investments at Risk

2017 ◽  
Vol 8 (1) ◽  
pp. 91-114
Author(s):  
Bernard Lapeyre ◽  
Emile Quinet
Keyword(s):  
Cost Benefit Analysis ◽  
Investment Decision ◽  
Decision Rules ◽  
Stopping Time ◽  
Cost Benefit ◽  
Cost Ratio ◽  
Public Authorities ◽  
Public Investments ◽  
Time Problem ◽  
Wide Range

Investment decision rules in risk situations have been extensively analyzed for firms. Most research focus on financial options and the wide range of methods based on dynamic programming currently used by firms to decide on whether and when to implement an irreversible investment under uncertainty. The situation is quite different for public investments, which are decided and largely funded by public authorities. These investments are assessed by public authorities, not through market criteria, but through public Cost-Benefit Analysis (CBA) procedures. Strangely enough, these procedures pay little attention to risk and uncertainty. The present text aims at filling this gap. We address the classic problem of whether and when an investment should be implemented. This stopping time problem is established in a framework where the discount rate is typically linked toGDP, which follows a Brownian motion, and where the benefits and cost of implementation follow linked Brownian motions. We find that the decision rule depends on a threshold value of the First Year Advantage/Cost ratio. This threshold can be expressed in a closed form including the means, standard deviations and correlations of the stochastic variables. Simulations with sensible current values of these parameters show that the systemic risk, coming from the correlation between the benefits of the investment and economic growth, is not that high, and that more attention should be paid to risks relating to the construction cost of the investment; furthermore, simple rules of thumb are designed for estimating the above-mentioned threshold. Some extensions are explored. Others are suggested for further research.

Cost-Benefit Analysis of Two Decision Criteria for Spondee Threshold Measurements

1975 ◽  
Vol 18 (1) ◽  
pp. 105-114
Author(s):  
Michael R. Chial ◽  
William G. Beck ◽  
Glen Vanlandingham
Keyword(s):  
Cost Benefit Analysis ◽  
Decision Rules ◽  
Cost Benefit ◽  
Cost Ratio ◽  
Testing Time ◽  
Benefit Cost Ratio ◽  
Correct Rule ◽  
The Cost ◽  
Test Retest Reliability ◽  
Benefit Cost

Normal-hearing subjects were tested and retested using two spondee threshold criteria: a strict 50% correct rule and a 50% or 75% correct (or both) rule. The 50% criterion produced lower thresholds at the cost of poorer test-retest reliability and longer test durations. Both decision rules gave lower threshold SPL values and required less testing time during the second trial. A proposed benefit-cost ratio model indicated that the 50% or 75% (or both) decision rule gives a better return on the investment of clinical effort.

scholarly journals Economic Analysis of the Use of VCS2000 for Pork Carcass Meat Yield Grading in Korea

Animals ◽  
2021 ◽  
Vol 11 (5) ◽  
pp. 1297
Author(s):  
Juntae Kim ◽  
Hyo-Dong Han ◽  
Wang Yeol Lee ◽  
Collins Wakholi ◽  
Jayoung Lee ◽  
...  
Keyword(s):  
Economic Analysis ◽  
Net Present Value ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Feed Consumption ◽  
Cost Ratio ◽  
Benefit Analysis ◽  
Labor Costs ◽  
Meat Yield ◽  
The Cost

Currently, the pork industry is incorporating in-line automation with the aim of increasing the slaughtered pork carcass throughput while monitoring quality and safety. In Korea, 21 parameters (such as back-fat thickness and carcass weight) are used for quality grading of pork carcasses. Recently, the VCS2000 system—an automatic meat yield grading machine system—was introduced to enhance grading efficiency and therefore increase pork carcass production. The VCS2000 system is able to predict pork carcass yield based on image analysis. This study also conducted an economic analysis of the system using a cost—benefit analysis. The subsection items of the cost-benefit analysis considered were net present value (NPV), internal rate of return (IRR), and benefit/cost ratio (BC ratio), and each method was verified through sensitivity analysis. For our analysis, the benefits were grouped into three categories: the benefits of reducing labor costs, the benefits of improving meat yield production, and the benefits of reducing pig feed consumption through optimization. The cost-benefit analysis of the system resulted in an NPV of approximately 615.6 million Korean won, an IRR of 13.52%, and a B/C ratio of 1.65.

scholarly journals Post-Disaster Assessment of the Performance of Hazard Mitigation Projects: The California SMART Approach

2010 ◽  
Vol 5 (2) ◽  
pp. 172-179 ◽  
Author(s):  
Michael R. Boswell ◽  
◽  
William J. Siembieda ◽  
Kenneth C. Topping ◽  
Keyword(s):  
Emergency Management ◽  
Cost Benefit Analysis ◽  
Hazard Mitigation ◽  
Cost Benefit ◽  
Project Performance ◽  
Efficient Manner ◽  
Public Investments ◽  
Review Team ◽  
Disaster Assessment ◽  
Mitigation Projects

California’s SMART (State Mitigation Assessment Review Team) program for assessing natural hazard mitigation project performance after a disaster is a method of integrating multiple state agencies’ expertise into a working tool for assessing the value of public investments in risk reduction. The intent of the SMART program is to provide the California Emergency Management Agency with information about the performance of publicly financed mitigation projects so that it can better allocate future funding and improve the overall safety of California. A key aspect of the program is the mobilization of California State University faculty and staff from across the state after a disaster in order to conduct rapid performance assessments while field data is available. In order to test the SMART system, a pilot study was conducted using the Yountville Flood Barrier Wall Project performance during a 2005 flood on the Napa River. The case validated the idea that for a flood project, a rapid evaluation could be conducted using field observations that establish the height and extent of flooding and include the project’s original cost-benefit analysis. The data produced from this type of evaluation program will be valuable to state emergency management agencies trying to allocate program grants in the most efficient manner and to government agencies who want to make sure that federal dollars are being spent wisely.

scholarly journals Cost-benefit analysis of pharmacist interventions over 36 months in a university hospital

2020 ◽  
Vol 54 ◽  
pp. 94
Author(s):  
Maurilio de Souza Cazarim ◽  
João Paulo Vilela Rodrigues ◽  
Priscila Santos Calcini ◽  
Thomas Einarson ◽  
Leonardo Régis Leira Pereira
Keyword(s):  
Marginal Cost ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
University Hospital ◽  
Cost Ratio ◽  
Benefit Analysis ◽  
Net Benefit ◽  
Hospital Perspective ◽  
Benefit Cost Ratio ◽  
Tertiary Teaching

OBJECTIVE: To perform a cost-benefits analysis of a clinical pharmacy (CP) service implemented in a Neurology ward of a tertiary teaching hospital. METHODS: This is a cost-benefit analysis of a single arm, prospective cohort study performed at the adult Neurology Unit over 36 months, which has evaluated the results of a CP service from a hospital and Public Health System (PHS) perspective. The interventions were classified into 14 categories and the costs identified as direct medical costs. The results were analyzed by the total and marginal cost, the benefit-cost ratio (BCR) and the net benefit (NB). RESULTS: The total 334 patients were followed-up and the highest occurrence in 506 interventions was drug introduction (29.0%). The marginal cost for the hospital and avoided cost for PHS was US$182±32 and US$25,536±4,923 per year; and US$0.55 and US$76.4 per patient/year. The BCR and NB were 0.0, -US$26,105 (95%CI -31,850 – -10,610), -US$27,112 (95%CI -33,160–11,720) for the hospital and; 3.0 (95%CI 1.97–4.94), US$51,048 (95%CI 27,645–75,716) and, 4.6 (95%CI 2.24–10.05), US$91,496 (95%CI 34,700–168,050; p < 0.001) for the PHS, both considering adhered and total interventions, respectively. CONCLUSIONS: The CP service was not directly cost-benefit at the hospital perspective, but it presented savings for forecast cost related to the occurrence of preventable morbidities, measuring a good cost-benefit for the PHS.

scholarly journals Guide to cost benefit analysis of community-based interventions

2014 ◽  
Vol 3 (5) ◽  
pp. 47
Author(s):  
Sanni Yaya ◽  
Xiaonan Li
Keyword(s):  
Net Present Value ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Cost Ratio ◽  
Benefit Analysis ◽  
Costs And Benefits ◽  
Community Based Interventions ◽  
Community Based ◽  
Benefit Cost Ratio ◽  
The Cost

This paper offers a general guide on how to conduct a proper economic analysis for community-based intervention projects. Identification and quantification of costs and benefits are the focus of the cost benefit analysis. We categorize costs and benefits from human and physical perspectives and pay special attention to the measures of saving human lives accompanied by the proposed calculation methods. We recommend net present value and benefit-cost ratio as the criteria to assess projects and highlight some challenges remaining in the analysis.

Information Technology Process Improvement Decision-Making

2012 ◽  
Vol 3 (2) ◽  
pp. 18-35
Author(s):  
Sandy A. Lamp ◽  
Kathleen M. Hargiss ◽  
Caroline Howard
Keyword(s):  
Decision Making ◽  
Process Improvement ◽  
Cost Benefit Analysis ◽  
Investment Decision ◽  
Cost Benefit ◽  
Final Decision ◽  
Insurance Company ◽  
Senior Leadership ◽  
Structured Interviews ◽  
Process Managers

This article is derived from a qualitative multicase study with two settings that explored the way decisions are made in two IT organizations regarding process improvement initiatives by using face-to-face semi-structured interviews with 20 IT process owners and managers. The two participating organizations are a healthcare insurance company and a manufacturer of electronic interconnects. The study sought to uncover (a) how IT process improvements are prioritized and how approvals are attained, (b) how senior leadership is involved in decision making, (c) how security and risk are considered, (d) if and how formal process improvement methodologies are used, (e) if and how estimated and actual cost benefit analysis are conducted associated with decisions, and (f) how alignment with organizational goals is attained. The topic of IT governance was narrowed to explore the perspective of IT process owners and process managers, and their approaches and methodologies used with IT process improvement initiatives. The study found that pre-decision stages take place in IT investment decision making, and that process owners and process managers, participants other than senior leadership, and executive level decision makers are involved in these pre-decision stages and may be involved in the final decision stages.

Tackling conservation/welfare conflicts in the management of wild animals

2002 ◽  
Vol 8 (1) ◽  
pp. 36 ◽  
Author(s):  
James K. Kirkwood
Keyword(s):  
Review Process ◽  
Biological Diversity ◽  
Cost Benefit Analysis ◽  
Species Conservation ◽  
Cost Benefit ◽  
Ethical Review ◽  
Benefit Analysis ◽  
Wide Range ◽  
Ethical Review Process

During the last century there were two distinct and profound changes in attitudes to animals. First, it became widely understood that human activities and anthropogenic changes to the environment present a serious threat to biological diversity. In response to this many programmes to protect habitat and to conserve species have been launched. Second, advances in various fields of science led to a strengthening belief in many societies that a wide range of animals may have the capacity for consciousness and thus suffering. This has led to growing concern for the welfare of animals - the quality of their lives - and to the development of extensive bodies of welfare legislation in many countries. Concerns for species conservation and concerns for individual animal welfare do not always pull in the same direction. Around the world, conflicts are becoming commonplace between those who believe it can be justifiable to compromise the interests of individual animals in order to prevent species extinctions and those who do not. Such conflicts may be addressed and hopefully avoided or minimized through use of an ethical review process in which conservation benefits and welfare costs are carefully identified, considered and weighed in a cost/benefit analysis. A second function of this review process is to ensure that, where the decision is taken to proceed with a conservation programme that may adversely affect the welfare of some individuals, all necessary steps are taken to minimize these threats and their possible impacts.

Cost–benefit and water resources policy: a survey

Water Policy ◽  
2011 ◽  
Vol 14 (2) ◽  
pp. 250-280 ◽  
Author(s):  
Frank A. Ward
Keyword(s):  
Water Policy ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Trade Offs ◽  
Wide Range ◽  
Recent Developments ◽  
The Difference ◽  
Policy Cost ◽  
The Right

This paper reviews recent developments in cost–benefit analysis for water policy researchers who wish to understand the applications of economic principles to inform emerging water policy debates. The cost–benefit framework can provide a comparison of total economic gains and losses resulting from a proposed water policy. Cost–benefit analysis can provide decision-makers with a comparison of the impacts of two or more water policy options using methods that are grounded in time-tested economic principles. Economic efficiency, measured as the difference between added benefits and added costs, can inform water managers and the public of the economic impacts of water programs to address peace, development, health, the environment, climate and poverty. Faced by limited resources, cost–benefit analysis can inform policy choices by summarizing trade-offs involved in designing, applying, or reviewing a wide range of water programs. The data required to conduct a cost–benefit analysis are often poor but the steps needed to carry out that analysis require posing the right questions.

Cost Benefit Analysis of Industrial Noise Regulation

1995 ◽  
Vol 6 (1) ◽  
pp. 105-124 ◽  
Author(s):  
Stephen Holland ◽  
Jean Cross
Keyword(s):  
Occupational Health ◽  
Economic Analysis ◽  
Net Present Value ◽  
Cost Benefit Analysis ◽  
Health And Safety ◽  
Cost Benefit ◽  
Occupational Health And Safety ◽  
Cost Ratio ◽  
Regulatory Change ◽  
Present Value

This paper examines the application of the techniques of economic analysis to occupational health and safety regulations using occupational noise as an example. The paper explores the extent to which economic impact studies are practically feasible and useful in relation to occupational health and safety legislation. Six studies of the same regulatory change, from four countries were analysed. The results of these studies ranged from a strongly negative to a significantly positive net present value, depending on the assumptions made. The factor which had the greatest influence on these differences was the way in which benefits are costed. It is shown that in the field of Occupational Health and Safety, economic analysis does not produce a single valid net present value or benefit to cost ratio on which a decision to legislate can sensibly be based. However the analysis can, if properly directed provide useful information on factors which will enable organisations to optimise their response to the regulation and authorities to introduce regulations in a way which does not bear with unreasonable weight on specific sectors of the community.

Preliminary Cost-Benefit Analysis (CBA) for Safety Assist Technologies in ASEAN NCAP – Rationalizing the Impact to Road Safety for Malaysia’s Case

2014 ◽  
Vol 663 ◽  
pp. 596-603
Author(s):  
Zulhaidi Mohd Jawi ◽  
Aqbal Hafeez Ariffin ◽  
Yahaya Ahmad ◽  
Khairil Anwar Abu Kassim ◽  
Norlen Mohamed ◽  
...  
Keyword(s):  
Road Safety ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Cost Effective ◽  
Cost Ratio ◽  
Benefit Analysis ◽  
Benefit Cost Ratio ◽  
Benefit Cost ◽  
The Impact ◽  
Rating Scheme

The newly established New Car Assessment Program for Southeast Asian Countries (ASEAN NCAP) has incorporated Safety Assist Technologies (SATs) in its automobile safety rating scheme. In order for any assessed car to be eligible for the maximum 5-star rating, it should first be equipped with Electronic Stability Control (ESC) and fitted with seatbelt reminder (SBR). However, since these SATs are not being evaluated in their performance by the means of field testing, this paper explains the benefit of having these SATs through Cost-Benefit Analysis (CBA) which help to rationalize the importance of SATs in preventing road accidents or mitigating severity of injuries. Due to data limitation, this preliminary CBA assessment will only be focusing on Malaysia’s situation and is based on published sources and the authors’ best estimates. This study also includes the Cost-Benefit Analysis on Anti-lock Braking System (ABS), which is the basis for ESC technology, in preparation for its inclusion in the future rating scheme to expedite the vision of making ABS as standard fit in all ASEAN’s passenger cars. The preliminary result shows that all technologies – ESC, SBR and ABS – appear to be cost-effective (benefit/cost-ratio > 3) or most likely cost effective (1 < benefit/cost-ratio < 3) in Malaysia’s road safety situation per se.

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