Cost-Benefit analysis -ch10
- Created by: sammilaw
- Created on: 14-04-16 17:46
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- Cost-Benefit Analysis
- Chapter 10
- Stages:
- 1: Identification
- Identify the relevant costs and benefits for a project
- Difficult to do in reality - wide-ranging consequences
- 2: Monetary Value
- Putting a monetary value on the various costs/benefits
- Easy: jobs created/profit made
- Difficult: time or loss of lives
- 3: Statistical Forecasting
- Using statistical forecasting techniques to estimate costs/benefits over many years
- 4: Decision
- Drawing data together from previous stages to come to a decision
- 1: Identification
- Limitations:
- Distributional impacts
- Does not take into account how the costs/benefits are distributed
- i.e. highly localised or more wide-spread
- Political implications
- Choices may be made due to political reasons and the economists advice ignored
- Pricing
- Difficult to value things like environment
- Tie consuming and expensive
- Distributional impacts
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