Cost-benefit analysis 2400-M1AKiK
During the course the following topics will be discussed:
1. Introduction to Cost-Benefit Analysis (CBA)
a. Individual vs. Social Costs and Benefits
b. The purpose and uses of CBA
c. The demand and the cost of CBA for environmental projects
2. Conceptual Foundations of CBA
a. Using CBA for Decision Making
b. Fundamental Issues related to Willingness to Pay
3. Microeconomic Foundations of CBA
a. Social surplus and allocative efficiency
b. Alternative ways to calculated Net Social Benefits
4. Economic value of environment
a. Use, non-use and option values
b. Direct and indirect effects
5. Shadow prices
a. General ways to derive shadow prices
6. Valuing environmental Impacts - revealed preferences methods
a. Hedonic price Method
b. Travel Cost Method
7. Valuing environmental Impacts - stated preferences methods
a. Contingent valuation
b. Choice modelling
8. Discounting benefits and costs
a. Comparing projects with different time frames
b. Inflation, real and nominal values
c. The social discount rate
9. Risk and uncertainty
a. Economic theory
b. Risk and irreversibility
c. Risk and the social discount rate
10. Accuracy of CBA
a. Sensitivity analysis
b. Sources of errors in CBA studies
c. The distribution of net benefits over time
d. Concerns about the role of CBA in the political processes
11. Related evaluation methods and accuracy
a. Cost-Effectiveness Analysis
b. Multi Criteria Analysis.
Type of course
Course coordinators
Learning outcomes
After completing the course, the student can apply CBA in practice. She/he is aware of the complexity of this process of this analysis. In addition, the student knows the bases of other economic techniques for the public projects assessment.
SW01, SW02, SW03, SW04, SW05, SU01, SU02, SU03, SU04, SU05, SU06, SU07, SK01, SK02, SK03
Assessment criteria
The final grade consists of two elements: 40% points are for case studies, 60% points are for the final test. In order to pass the course, you need to get at least 50% in the final test and at least 50% of all points possible to get.
Bibliography
1. Boardman, A;, Greenberg, D., Vining, A., Weimer, D., (2012). Cost-Benefit Analysis: Concepts and Practice, 4th edition, Pearson
2. EC (2014). Guide to Cost-Benefit Analysis of Investment Projects for Cohesion Policy 2014-2020, http://ec.europa.eu/regional_policy/en/information/publications/guides/2014/guide-to-cost-benefit-analysis-of-investment-projects-for-cohesion-policy-2014-2020
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: