Benefit-Cost Analysis

2019 ◽  
pp. 103-122
Author(s):  
Lisa A. Robinson ◽  
James K. Hammitt
Keyword(s):  
Cost Analysis ◽  
Evidence Base ◽  
Benefit Cost Analysis ◽  
Policy Impacts ◽  
Benefit Cost ◽  
Do So ◽  
Available Resources

Decisions on investing in health as well as other policies require deciding how to best allocate available resources—recognizing that using labor, materials, and other resources for one purpose means that they cannot be used for other purposes. The analytic approaches discussed in this volume have in common the overarching goal of providing information on policy impacts, so as to provide an evidence base for decisions. What distinguishes benefit-cost analysis is its emphasis on explicitly accounting for all significant outcomes (both health and non-health) and on valuing them in monetary units to facilitate comparison. Benefit-cost analysis makes the relative values of different outcomes explicit. As conventionally implemented, benefit-cost analysis does not address the distribution of impacts within a population, but it can be supplemented to do so.

Benefit-Cost Analysis, Policy Impacts, and Congressional Hearings

2019 ◽  
Vol 10 (1) ◽  
pp. 65-94
Author(s):  
Deven Carlson ◽  
Joseph Ripberger ◽  
Wesley Wehde ◽  
Hank Jenkins-Smith ◽  
Carol Silva ◽  
...  
Keyword(s):  
Cost Analysis ◽  
Academic Research ◽  
Cost Analyses ◽  
Congressional Hearings ◽  
Benefit Cost Analysis ◽  
Glen Canyon Dam ◽  
Guidance Documents ◽  
Policy Impacts ◽  
Glen Canyon ◽  
Benefit Cost

Methods for identifying relevant policy impacts for valuation in benefit-cost analyses (BCAs) have received relatively little attention in academic research, applied policy analyses, and guidance documents. In this paper, we develop a systematic, transparent, and replicable process that draws upon information contained in records of Congressional hearings to identify relevant policy impacts for valuation in a BCA. Our approach involves classifying – and subsequently analyzing – statements from witnesses testifying in Congressional hearings on the topic of the BCA. By using Congressional hearings as the basis for our approach, we are identifying potential policy impacts from information provided during the very process the BCA is intended to inform. However, because this approach is quite resource-intensive and would be somewhat burdensome for agencies to implement, it may be best applied in the academic realm, with identified impacts resulting from such applications then made available to agency personnel for potential inclusion in BCAs. Using the case of the Glen Canyon Dam, we demonstrate the approach and its resulting improvements in the quality and transparency of the BCA it was intended to inform.

What’s in, what’s out? Towards a rigorous definition of the boundaries of benefit-cost analysis

2021 ◽  
pp. 1-17
Author(s):  
Daniel Acland
Keyword(s):  
Cost Analysis ◽  
Willingness To Pay ◽  
Low Cost ◽  
Consumer Sovereignty ◽  
Benefit Cost Analysis ◽  
Rigorous Definition ◽  
Pareto Criterion ◽  
Definition Of ◽  
Benefit Cost

Abstract Benefit-cost analysis (BCA) is typically defined as an implementation of the potential Pareto criterion, which requires inclusion of any impact for which individuals have willingness to pay (WTP). This definition is incompatible with the exclusion of impacts such as rights and distributional concerns, for which individuals do have WTP. I propose a new definition: BCA should include only impacts for which consumer sovereignty should govern. This is because WTP implicitly preserves consumer sovereignty, and is thus only appropriate for ‘sovereignty-warranting’ impacts. I compare the high cost of including non-sovereignty-warranting impacts to the relatively low cost of excluding sovereignty-warranting impacts.

Distributional Weights in Benefit-Cost Analysis: Examples from Rwanda and Uganda

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Charles B. Moss ◽  
Andrew Schmitz
Keyword(s):  
Developing Countries ◽  
Cost Analysis ◽  
Research And Development ◽  
Agricultural Research ◽  
Systematic Variation ◽  
Policy Makers ◽  
Benefit Cost Analysis ◽  
Small Producer ◽  
Agricultural Research And Development ◽  
Benefit Cost

Abstract The question of how to allocate scarce agricultural research and development dollars is significant for developing countries. Historically, benefit/cost analysis has been the standard for comparing the relative benefits of alternative investments. We examine the potential of shifting the implicit equal weights approach to benefit/cost analysis, as well as how a systematic variation in welfare weights may affect different groups important to policy makers. For example, in the case of Rwandan coffee, a shift in the welfare weights that would favor small coffee producers in Rwanda over foreign consumers of Rwandan coffee would increase the support for investments in small producer coffee projects. Generally, changes in welfare weights alter the ordering for selecting investments across alternative projects.

Sign in / Sign up

Export Citation Format

Share Document