Cost-Benefit Analysis for Project Appraisal

This book uses modern economic tools to obtain general equilibrium cost-benefit rules to evaluate small, large and ultra-large projects.

Per-Olov Johansson (Author), Bengt Kriström (Author)

9781107548220, Cambridge University Press

Paperback / softback, published 22 October 2015

250 pages, 28 b/w illus. 4 tables
24.7 x 17.4 x 1.2 cm, 0.5 kg

Written by two leading experts, this is a compact guide to the key tools and methods necessary to carry out cost-benefit analysis (CBA). The authors use modern economic tools to obtain general equilibrium cost-benefit rules that can be used to evaluate small projects, as well as large and even mega projects. Intertemporal issues like discounting, the shadow price of capital, and the treatment of risk are covered, and a state-of-the-art summary of available methods for the valuation of unpriced commodities is also included. In addition, the book provides detailed expositions of the marginal cost of public goods (MCPF), the marginal excess burden of taxes (MEB), and second-best evaluation rules, and shows how these concepts are interrelated. The importance of undertaking due diligence in evaluations is highlighted. This is an excellent toolkit for graduate students learning about the principles of CBA, and is a useful guide for government officials and policymakers.

Preface
1. Introduction
2. The basic cost-benefit (C-B) model 9
3. Market distortions
4. Intertemporal generalization
5. Natural resources
6. Small versus large projects
7. Aggregation
8. Appraisal in a risky world
9. Notes on estimation
10. A smörgåsbord of further topics
11. Robustness checks and due diligence in evaluations
References
Index.

Subject Areas: Environmental economics [KCN], Microeconomics [KCC], Economics [KC]