scholarly journals Economic Analysis and Investment Priorities in Sweden’s Transport Sector

2018 ◽  
Vol 9 (1) ◽  
pp. 120-146 ◽  
Author(s):  
Henrik Andersson ◽  
Lars Hultkrantz ◽  
Gunnar Lindberg ◽  
Jan-Eric Nilsson
Keyword(s):  
Decision Makers ◽  
Transport Infrastructure ◽  
Transport Sector ◽  
Main Concern ◽  
Strategic Choices ◽  
Construction Costs ◽  
Benefit Cost Analysis ◽  
Ex Post ◽  
Benefit Cost ◽  
National Road

Beginning as a planning tool within Sweden’s national road administration some 50 years ago, benefit-cost analysis (BCA) has come to be a pillar of the national transport policy because of subsequent strategic choices made by the national parliament. These choices made it necessary to widen the analysis of costs to include also externalities and a foregone conclusion was that efficient investment priorities should be made based on BCA. But no one asked whether the political decision makers or the BCA models were up to that task. This paper reviews the institutional framework and practice of BCA in Sweden for transport infrastructure investment, and considers design issues that have been and still are debated, such as whether the discount rate should include a risk term and how to account for the marginal cost of public funds. A main concern with BCA results is the underestimation of construction costs, making transport sector projects look better than they are. Several ex post analyses have established that a higher NPV ratio increases the probability of being included in the investment program proposal prepared by the agency. The requirement to let projects undergo BCA seems to make planners “trim” project proposals by trying to reduce investment costs without significantly reducing benefits. This relationship is weaker among profitable projects. Moreover, there is no correlation between rate of return and the probability of being included in the final program, which is established on political grounds.

Accounting for the Distribution of Benefits and Costs in Benefit–Cost Analysis

2020 ◽  
pp. 1-21
Author(s):  
James K. Hammitt
Keyword(s):  
Cost Analysis ◽  
Decision Makers ◽  
Policy Choice ◽  
Alternative Evaluation ◽  
Benefit Cost Analysis ◽  
Transfer Programs ◽  
Net Benefits ◽  
Benefit Cost ◽  
Benefits And Costs

Abstract Benefit–cost analysis (BCA) is often viewed as measuring the efficiency of a policy independent of the distribution of its consequences. The role of distributional effects on policy choice is disputed; either: (a) the policy that maximizes net benefits should be selected and distributional concerns should be addressed through other measures, such as tax and transfer programs or (b) BCA should be supplemented with distributional analysis and decision-makers should weigh efficiency and distribution in policy choice. The separation of efficiency and distribution is misleading. The measure of efficiency depends on the numéraire chosen for the analysis, whether monetary values or some other good (unless individuals have the same rates of substitution between them). The choice of numéraire is not neutral; it can affect the ranking of policies by calculated net benefits. Alternative evaluation methods, such as BCA using a different numéraire, weighted BCA, or a social welfare function (SWF), may better integrate concerns about distribution and efficiency. The most appropriate numéraire, distributional weights, or SWFs cannot be measured or statistically estimated; it is a normative choice.

scholarly journals A retrospective assessment of the costs of EPA’s 1998 Locomotive Emission Standards

2014 ◽  
Vol 5 (2) ◽  
pp. 285-314 ◽  
Author(s):  
Elizabeth Kopits
Keyword(s):  
Cost Analysis ◽  
Total Cost ◽  
Benefit Cost Analysis ◽  
Retrospective Assessment ◽  
Emission Standards ◽  
Ex Post ◽  
Data Limitations ◽  
The Cost ◽  
Benefit Cost ◽  
Benefits And Costs

Abstract:While the need to update EPA benefit-cost analysis to reflect the most recent science is broadly acknowledged, little work has been done examining how well ex ante BCAs estimate the actual benefits and costs of regulations. This paper adds to the existing literature on ex post cost analyses by examining EPA’s analysis of the 1998 Locomotive Emission Standards. Due to data limitations and minimal ability to construct a reasonable counterfactual for each component of the cost analysis, the assessment relies mainly on industry expert opinion, augmented with ex post information from publicly available data sources when possible. The paper finds that the total cost of bringing line-haul locomotives into compliance with the 1998 Locomotive Emission Standards rule remains uncertain. Even though the initial per-unit locomotive compliance costs were higher than predicted by EPA, total costs also depend on the number of locomotives affected by the regulation. Over 2000–2009, the number of newly built line-haul locomotives was higher but the number of remanufactured line-haul locomotives was lower than EPA’s estimate.

scholarly journals Prioritization of Low-Volume Road Projects Considering Project Cost and Network Accessibility: An Incremental Benefit–Cost Analysis Framework

2021 ◽  
Vol 13 (23) ◽  
pp. 13434
Author(s):  
Wubeshet Woldemariam
Keyword(s):  
Cost Analysis ◽  
Decision Makers ◽  
Performance Criteria ◽  
Project Cost ◽  
Benefit Cost Analysis ◽  
Incremental Benefit ◽  
Study Results ◽  
Road Projects ◽  
Low Volume ◽  
Benefit Cost

Due to insufficient funds to implement all candidate road infrastructure projects, there is a need to efficiently utilize available funds and select candidate projects that maximize performance criteria decision-makers. This paper proposes an incremental benefit–cost analysis (IBCA) framework to prioritize low-volume road (LVR) projects that maximize road network accessibility considering project cost and network accessibility requirements. The study results show that the accessibility benefits of road projects depend not only on their cost requirements but also on their spatial locations in the network that affect their network-level accessibility benefits per unit cost of investment. Additionally, the number of disrupted LVR links cannot fully determine the degree of change in network accessibility. The framework enables decision-makers to consider project cost requirements and the accessibility-related impacts of LVR projects, maximize economic benefits, and ensure the sustainability of the LVR network performance.

Benefit-Cost Analysis of Economic Resilience Actions

2017 ◽  
Author(s):  
Adam Rose
Keyword(s):  
Cost Analysis ◽  
Decision Makers ◽  
Economic Resilience ◽  
Public And Private ◽  
Benefit Cost Analysis ◽  
Comprehensive Benefit ◽  
Sector Decision ◽  
Public And Private Sector ◽  
Static Form ◽  
Benefit Cost

Economic resilience, in its static form, refers to utilizing remaining resources efficiently to maintain functionality of a household, business, industry, or entire economy after a disaster strikes, and, in its dynamic form, to effectively investing in repair and reconstruction to promote accelerated recovery. As such, economic resilience is oriented to implementing various post-disaster actions (tactics) to reduce business interruption (BI), in contrast to pre-disaster actions such as mitigation that are primarily oriented to preventing property damage. A number of static resilience tactics have been shown to be effective (e.g., conserving scarce inputs, finding substitutes from within and from outside the region, using inventories, and relocating activity to branch plants/offices or other sites). Efforts to measure the effectiveness of the various tactics are relatively new and aim to translate these estimates into dollar benefits, which can be juxtaposed to estimates of dollar costs of implementing the tactics. A comprehensive benefit-cost analysis can assist public- and private sector decision makers in determining the best set of resilience tactics to form an overall resilience strategy.

Environmental Constraints on Hydropower: An Ex Post Benefit-Cost Analysis of Dam Relicensing in Michigan

2006 ◽  
Vol 82 (3) ◽  
pp. 384-403 ◽  
Author(s):  
M. J. Kotchen ◽  
M. R. Moore ◽  
F. Lupi ◽  
E. S. Rutherford
Keyword(s):  
Cost Analysis ◽  
Environmental Constraints ◽  
Benefit Cost Analysis ◽  
Ex Post ◽  
Benefit Cost

A Retrospective Benefit-Cost Analysis on the Elwha River Restoration Project

2019 ◽  
Vol 11 (1) ◽  
pp. 76-100
Author(s):  
Allen Bellas ◽  
Lea Kosnik
Keyword(s):  
Cost Analysis ◽  
River Restoration ◽  
River Ecosystem ◽  
Elwha River ◽  
Benefit Cost Analysis ◽  
Current State ◽  
Ex Post ◽  
Original Analysis ◽  
The Cost ◽  
Benefit Cost

AbstractIn 1992, Congress passed The Elwha River Ecosystem and Fisheries Restoration Act with the goal of “full restoration of The Elwha River Ecosystem and native anadromous fisheries.” As part of that act, the federal government was required to produce a benefit-cost analysis on dam removal of the Elwha and Glines Canyon dams, which was published in 1994. This article revisits that initial 1994 benefit-cost analysis; background on its methods and assumptions is given, comparisons are made to current state-of-the-art techniques in benefit-cost analysis, and an ex post benefit-cost analysis of the project is conducted for comparison purposes. We find that the cost and scope of the project exceeded original expectations, the cost of the foregone electricity generation was less than expected, and that anticipated recreational and fisheries benefits were both delayed, and lower, than expected. Furthermore, issues such as the value of hatchery-spawned versus wild anadromous fish seem not to have been anticipated in the original analysis, highlighting the fact that in doing an ex ante analysis, researchers must expect that unexpected factors may influence the ex post results of any project.

Empirical Damage Relationships and Benefit-Cost Analysis for the Seismic Retrofit of URM Buildings

2017 ◽  
Vol 33 (3) ◽  
pp. 1053-1074 ◽  
Author(s):  
Brandon Paxton ◽  
Kenneth J. Elwood ◽  
Jason M. Ingham
Keyword(s):  
New Zealand ◽  
Pacific Northwest ◽  
Risk Mitigation ◽  
Seismic Retrofit ◽  
Construction Costs ◽  
Benefit Cost Analysis ◽  
Damage Data ◽  
Strong Candidate ◽  
Observed Damage ◽  
Benefit Cost

Benefit-cost analyses for the seismic retrofit of unreinforced masonry (URM) buildings in downtown Victoria, British Columbia, Canada, were undertaken, considering the seismic hazard, building value, occupant/pedestrian exposure, a variety of strengthening measures, and local construction costs. The analyses are underpinned by building motion-damage relationships developed based on observed damage in past earthquakes in California and New Zealand. The considered upgrading measures ranged from parapet bracing to comprehensive seismic upgrades consistent with local practices. Parapet bracing and other partial retrofits were shown to have favorable benefit-cost ratios and thus be strong candidate measures for risk mitigation programs. Full upgrades were shown to have less favorable benefit-cost ratios. While applied to Victoria, the generality of the methodology and the use of observed damage data from California and New Zealand make the findings of this study particularly relevant for similar locations throughout the Pacific Northwest and abroad.

Using STEAM for Benefit-Cost Analysis of Transportation Alternatives

1998 ◽  
Vol 1649 (1) ◽  
pp. 63-71 ◽  
Author(s):  
Patrick Decorla-Souza ◽  
Harry Cohen ◽  
Dan Haling ◽  
James Hunt
Keyword(s):  
Cost Analysis ◽  
Travel Demand ◽  
Demand Management ◽  
Decision Makers ◽  
Pollutant Emissions ◽  
Travel Demand Management ◽  
Benefit Cost Analysis ◽  
Wide Range ◽  
Surface Transportation ◽  
Benefit Cost

The Intermodal Surface Transportation Efficiency Act emphasizes assessment of multimodal alternatives and demand management strategies. This emphasis has increased the need for planners to provide good comparative information to decision makers with regard to proposed alternative transportation solutions. Benefit-cost analysis is a useful tool to compare the economic worth of alternatives and evaluate tradeoffs between economic benefits and nonmonetizable social and environmental impacts. FHWA has developed a new tool for benefit-cost analysis called the Surface Transportation Efficiency Analysis Model (STEAM). The software is based on the principles of economic analysis and allows development of monetized impact estimates for a wide range of transportation investments and policies, including major capital projects, pricing, and travel demand management. Impact measures are monetized to the extent feasible, and quantitative estimates of natural resource usage (e.g., energy consumption) and environmental impact (e.g., pollutant emissions) are also provided. Decision makers can then use net monetary benefits (or costs) of alternatives as computed by STEAM to evaluate tradeoffs against nonmonetizable impacts. The software was applied in evaluation of corridor alternatives for the Central Freeway corridor in the hypothetical urban area of Any City, U.S.A.

scholarly journals Dynamic Benefit-Cost Analysis for Uncertain Futures

2019 ◽  
Vol 10 (2) ◽  
pp. 206-225 ◽  
Author(s):  
Susan E. Dudley ◽  
Daniel R. Pérez ◽  
Brian F. Mannix ◽  
Christopher Carrigan
Keyword(s):  
Cost Analysis ◽  
Network Effects ◽  
Global Scale ◽  
Decision Makers ◽  
Essential Information ◽  
Benefit Cost Analysis ◽  
Trade Offs ◽  
Market Solutions ◽  
Benefit Cost ◽  
Policy Problems

Abstract“Uncertain futures” refers to a set of policy problems that possess some combination of the following characteristics: (i) they potentially cause irreversible changes; (ii) they are widespread, so that policy responses may make sense only on a global scale; (iii) network effects are difficult to understand and may amplify (or moderate) consequences; (iv) time horizons are long; and (v) the likelihood of catastrophic outcomes is unknown or even unknowable. These characteristics tend to make uncertain futures intractable to market solutions because property rights are not clearly defined and essential information is unavailable. These same factors also pose challenges for benefit-cost analysis (BCA) and other traditional decision analysis tools. The diverse policy decisions confronting decision-makers today demand “dynamic BCA,” analytic frameworks that incorporate uncertainties and trade-offs across policy areas, recognizing that: perceptions of risks can be uninformed, misinformed, or inaccurate; risk characterization can suffer from ambiguity; and experts’ tendency to focus on one risk at a time may blind policymakers to important trade-offs. Dynamic BCA – which recognizes trade-offs, anticipates the need to learn from experience, and encourages learning – is essential for lowering the likelihoods and mitigating the consequences of uncertain futures while encouraging economic growth, reducing fragility, and increasing resilience.

VP36 Benefit Cost Analysis Of Electronic Claims Processing System In Ghana

2018 ◽  
Vol 34 (S1) ◽  
pp. 168-169
Author(s):  
Rebecca Addo ◽  
Justice Nonvignon ◽  
Huihui Wang
Keyword(s):  
Health Insurance ◽  
Cost Analysis ◽  
Health System ◽  
Decision Makers ◽  
Total Cost ◽  
Benefit Cost Analysis ◽  
Provider Payment ◽  
Study Population ◽  
Benefit Cost ◽  
Electronic Processing

Introduction:Since the inception of the Ghana National Health Insurance Scheme (NHIS), it has been pursuing a number of provider payment mechanisms that could not only control the continuous escalating costs of claims payout, but also facilitate the claims processing time. In lieu of this, electronic processing of claims (E-claims) was introduced in 2013 as part of the World Bank supported Health Insurance project that sought to facilitate the financial and operational management of the NHIS. It was piloted in 29 health facilities up to March 2014. They reported cost savings made by the NHIS using E-claims, creating interest in scaling it up. However, the comparative effectiveness and cost effectiveness of E-claims to the health system compared to manual claims processing is unknown. Therefore, to provide decision makers with the appropriate information to choose between manual and E-claims processing, this study sought to evaluate the cost-benefit of E-claims.Methods:A benefit-cost analysis was used to evaluate the efficiency of E-claims from the perspective of the health system. Health providers and the purchaser (NHIS claims processing center) were the study population. Resource use and costs were obtained from the study population. The volumes and values of claims reimbursed and the claims rejection rate were used as the benefits of claims processing. The incremental benefit-cost ratio (IBCR) was estimated for the provider, purchaser and the entire health system. Analysis was conducted in Microsoft Excel.Results:The total cost per claim for providers were USD 1,177.04 and USD 1,240.65 for E-claims and paper claims respectively. The total cost per E-claims and paper claims for the purchaser were 592.17 and 502.19 respectively. Total benefit per E-claim and paper claim processing for the providers were USD 8,562.90 and USD 8,888.37 respectively while that for the purchaser was USD 11,037.62 and USD 8,737.60 respectively. Processing claims electronically led to incremental gains by both providers and purchasers. Providers gained additional USD 2008.51 while the purchaser gained USD 2,300.02. The IBCR was estimated at −19.75, 25.56 and 5.10 for all providers, purchaser and both providers and purchaser of the health system respectively. Thus the IBCR was less than 1for the providers and more than 1 for purchaser and both purchaser and providers.Conclusions:The electronic processing of claims is more efficient compared to manual processing in the Ghana NHIS. This provides decision makers with evidence for scaling it up to all the facilities in Ghana.

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