Cost — Benefit Analysis and Large-Scale Infrastructure Projects: State of the Art and Challenges

2007 ◽  
Vol 34 (4) ◽  
pp. 598-610 ◽  
Author(s):  
Roger Vickerman
Keyword(s):  
Computable General Equilibrium ◽  
Imperfect Competition ◽  
Large Scale ◽  
Best Practice ◽  
Network Effects ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Benefit Analysis ◽  
Infrastructure Projects ◽  
Long Time

In this paper I review the problems surrounding the use of cost-benefit analysis (CBA) in the appraisal of large-scale infrastructure projects. I define the requirements of a best-practice transport CBA and show the difficulties in achieving these for large-scale projects. The main difficulties discussed are those of forecasting over long time periods, dealing with imperfect competition in transport-using sectors to obtain estimations of wider transport benefits, introducing private finance and appraising network effects. I conclude that CBA can remain a valuable tool as part of the appraisal process but that the inputs to a CBA have to be carefully assessed, and complementary approaches, such as computable general equilibrium modelling, have a useful role to play for very large or network projects.

scholarly journals Integrated Model of Computable General Equilibrium and Social Cost Benefit Analysis of an Indian Oil Refinery: Future Projections and Macroeconomic Effects

2018 ◽  
Vol 10 (1-2) ◽  
pp. 96-125
Author(s):  
Sumana Chaudhuri ◽  
Shovan Ray ◽  
Ganesh-Kumar
Keyword(s):  
General Equilibrium ◽  
Computable General Equilibrium ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Oil Refinery ◽  
Cge Model ◽  
Benefit Analysis ◽  
Model Framework ◽  
Financial Flows ◽  
Macroeconomic Effects

Cost benefit analysis (CBA) has long been used as a useful tool to appraise and evaluate the value of a range of investment projects to a society. Certain aspects of this method such as the appropriate discount rate is an important concern, because the choice of discount rates deeply affect the valuations of future income streams. Other aspects concerning financial flows and appropriate ‘shadow prices’ have also received considerable attention. However, when a megaproject with the character of a ‘universal intermediate’ is considered, its multiplier effects may be wide-ranging and permeate several economic and social layers and may be captured only in the aggregates. This study examines the costs and benefits of Vadinar refinery in Gujarat with a focus on this welfare dimension on society for the project. The framework explores a methodological breakthrough in CBA studies. In constituting the macroeconomic effects of expansion of the mega oil refinery, the wider economic impact (WEI) is estimated using the computable general equilibrium (CGE) model and incorporated into the CBA. This assimilation of CBA with macroeconomic externality obtained from the CGE model framework is perhaps only one of its kind in economic analysis of major infrastructure projects of any country. CBA when combined with CGE as an analytical tool can be gainfully employed to appraise or evaluate large scale projects like oil refineries. JEL Classification: B41, C51, C52, C53, C54, C55, D50, D58, D60, D61, D62, H23, H43, L71, O22, Q43

Improving Assessment of Transport Policies by Dynamic Cost-Benefit Analysis

2003 ◽  
Vol 1839 (1) ◽  
pp. 107-114 ◽  
Author(s):  
Wolfgang Schade ◽  
Werner Rothengatter
Keyword(s):  
Network Effects ◽  
Cost Benefit Analysis ◽  
Dynamic Assessment ◽  
Cost Benefit ◽  
Transport Infrastructure ◽  
Transport Sector ◽  
The European Union ◽  
Benefit Analysis ◽  
Dynamic Approach ◽  
Economic Sectors

In the history of cost-benefit analysis (CBA), macroeconomic and micro-economic foundations have been developed. The latter has dominated in transport CBA during the last decades. The most widely used CBA approach can be characterized as comparative static and based on separate partial modeling. However, when it comes to significant indirect effects in the economic, social, and environmental systems connected with the transport system, alternative approaches to the microeconomic approach become inevitable. A system dynamics platform was developed that allows for a dynamic CBA integrating the most important indirect effect of transport policies. The approach was tested with large infrastructure programs and transport policy packages. Results of the dynamic approach reveal that the choice of the most favorable policy can change over time and depend on the time horizon defined for the analysis. In particular the dynamic approach allows for a clear allocation of costs and benefits to periods of time, which might be valuable information for policy acceptance and implementation. This research is integrated within a stream of European Commission projects on integrated and dynamic assessment, starting with the Assessment of Transport Strategies project (ASTRA) and extended by the projects Transport Infrastructure and Policy: A Macroeconomic Analysis for the European Union (TIPMAC) and Integrated Appraisal of Spatial Economic and Network Effects of Transport Investments and Policies (IASON). IASON focuses on analysis of indirect, second-round, or induced benefits and costs that occur through feedback effects between the transport sector and other economic sectors.

Evaluating the Economic Viability of Public Investments in Tourism

2019 ◽  
Vol 11 (1) ◽  
pp. 101-130
Author(s):  
Onil Banerjee ◽  
Martin Cicowiez ◽  
Adela Moreda
Keyword(s):  
Computable General Equilibrium ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Analytical Techniques ◽  
Integrated Approach ◽  
Economic Viability ◽  
Benefit Analysis ◽  
Development Bank ◽  
Public Investments ◽  
Benefits And Costs

AbstractVarious methods have been applied to evaluating the economic viability of public investments in tourism. In this article, we capitalize on the strengths of computable general equilibrium and cost-benefit analytical techniques and develop an integrated approach to evaluating public investments in tourism. We apply the approach to the evaluation of a US$6.25 million investment in tourism in Uruguay from the perspective of a multilateral development bank and a beneficiary government. These perspectives differ in a cost-benefit analysis (CBA) due to the timing of the costs incurred. The integrated approach is powerful in that it captures first and subsequent rounds of investment impacts of benefits and costs; resource diversion and constraints are accounted for, and the estimation of benefits is consistent with the welfare economics underpinnings of CBA.

scholarly journals Key Principles for Managing Recovery of Kelp Forests through Restoration

BioScience ◽  
2020 ◽  
Vol 70 (8) ◽  
pp. 688-698 ◽  
Author(s):  
Rebecca L Morris ◽  
Robin Hale ◽  
Elisabeth M A Strain ◽  
Simon E Reeves ◽  
Adriana Vergés ◽  
...  
Keyword(s):  
Best Practice ◽  
Cost Benefit Analysis ◽  
Current Knowledge ◽  
Spatial Scales ◽  
Cost Benefit ◽  
Dispersal Ability ◽  
Kelp Forests ◽  
Trial And Error ◽  
Benefit Analysis ◽  
Scant Attention

Abstract There is increasing interest in mitigating the loss of kelp forests through restoration, but this has received scant attention relative to other coastal habitats. We evaluate current knowledge centered on key restoration principles to provide guidelines for best practice in kelp restoration. The cause and scale of degradation is fundamental in determining if kelp can be restored and the methods required to promote reestablishment. Removal of stressors may be adequate to achieve restoration goals where degradation is not too widespread or acute. Extensive losses of kelp forests will often require active reseeding of areas because of the low dispersal ability of many kelp species. Restoration efforts have generally taken a trial-and-error approach at experimental scales to develop techniques for establishing individuals. Furthermore, studies that inform cost–benefit analysis and the appropriate spatial scales for restoration of sustainable kelp forests are urgently needed for prioritizing and scaling up restoration efforts globally.

Using Cost Benefit Analysis for Enterprise Resource Planning Project Evaluation

2001 ◽  
pp. 154-170 ◽  
Author(s):  
Kenneth Murphy ◽  
Steven John Simon
Keyword(s):  
Enterprise Resource Planning ◽  
User Satisfaction ◽  
Large Scale ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Resource Planning ◽  
Business Case ◽  
Benefit Analysis ◽  
Large Computer ◽  
Planning Project

The goal of this chapter is to demonstrate how cost benefit analysis can be applied to large-scale ERP projects, and that these methods can incorporate the intangible benefits, e.g., user satisfaction. Detailed information on the business case utilized by a large computer manufacturer in their decision to implement the SAP system R/3 is presented. We illustrate how this organization utilized techniques to include intangibles in the implementation project’s cost benefit analysis. The chapter concludes with a discussion on the state of valuing ERP projects and questions to be answered in the future.

scholarly journals Does Price Matter in Charitable Giving? Evidence from a Large-Scale Natural Field Experiment

2007 ◽  
Vol 97 (5) ◽  
pp. 1774-1793 ◽  
Author(s):  
Dean Karlan ◽  
John A List
Keyword(s):  
Field Experiment ◽  
Charitable Giving ◽  
Large Scale ◽  
Cost Benefit Analysis ◽  
Cost Benefit ◽  
Theoretical Work ◽  
Benefit Analysis ◽  
Natural Field ◽  
Natural Field Experiment ◽  
Matching Grant

We conducted a natural field experiment to further our understanding of the economics of charity. Using direct mail solicitations to over 50,000 prior donors of a nonprofit organization, we tested the effectiveness of a matching grant on charitable giving. We find that the match offer increases both the revenue per solicitation and the response rate. Larger match ratios (i.e., $3:$1 and $2:$1) relative to a smaller match ratio ($1:$1) had no additional impact, however. The results provide avenues for future empirical and theoretical work on charitable giving, cost-benefit analysis, and the private provision of public goods. (JEL D64, L31)

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