Description
Taylor and Francis Cost Benefit Analysis6Th Edition 2021 Edition by E.J. Mishan, Euston Quah
Cost-benefit analysis (CBA) is the systematic and analytical process of comparing benefits and costs in evaluating the desirability of a project or programme - often of a social nature. It attempts to answer such questions as whether a proposed project is worthwhile, the optimal scale of a proposed project and the relevant constraints. CBA is fundamental to government decision making and is established as a formal technique for making informed decisions on the use of society's scarce resources. This timely sixth edition of the classic Cost-Benefit Analysis text continues to build on the successful approach of previous editions, with lucid explanation of key ideas, simple but effective expository short chapters and an appendix on various useful statistical and mathematical concepts and derivatives. The book examines important developments in the discipline, with relevant examples and illustrations as well as new and expanded chapters which build upon standard materials on CBA. Highlights include:updated historical background of CBAextended non-market goods valuation methodsthe impact of uncertaintyevaluation of programmes and servicesbehavioural economicsdecision rules and heuristicsCBA and regulatory reformsCBA in developed and developing countriesvalue of household production other topics frequently encountered in CBA, such as costs of diseases and air pollution, and value of statistical life.This book is a valuable source and guide to international funding agencies, governments, interested professional economists and senior undergraduate and graduate students.The text is fully supported by a companion website, which includes discussion questions and PowerPoint slides for each chapter. PART I Scope and method1 Brief historical background to cost-benefit analysis2 What is cost-benefit analysis?3 Framework to cost-benefit analysisPART II Basic concepts of benefits and costs 4 Measurements of consumer surplus 5 Consumer surplus when several prices change 6 Consumer surplus when other things change 7 Introduction to the compensating variation 8 Measurements of rent 9 Is producer surplus a rent? PART III Shadow prices and transfer payments10 Introductory remarks 11 Opportunity cost of labour 12 Opportunity cost of unemployed labour 13 The additional benefits of using unemployed labour 14 The opportunity costs of imports 15 Transfer payments and double counting PART IV External effects16 Introduction to external effects 17 Adverse spillovers 18 Internalizing externalities 19 Evaluating spillovers 20 Compensating for environmental damage PART V Investment criteria21 Introduction to investment criteria 22 Crude investment criteria 23 The discounted present value criterion 24 The internal rate of return 25 The alleged superiority of the discounted present value criterion compared with the internal rate of return criterion and the net benefit ratio 26 Investment criteria in an ideal capital market 27 Calculation of rates of return and of time preference 28 Critique of the discounted present value criterion (I) 29 Critique of the discounted present value criterion (II) 30 The normalized compounded terminal value criterion (I) 31 The normalized compounded terminal value criterion (II) 32 The Pareto criterion and generational time33 Cost-benefit analysis, weights and normative economics PART VI Uncertainty34 Risk and certainty equivalence 35 Decision rules and heuristics (I) 36 Decision rules and heuristics (II) 37 How practical are decision rules and heuristics?38 Simple probability in decision making 39 Mixed strategies in decision making 40 Four additional strategems for coping with uncertainty PART VII Topics frequently encountered in Cost-Benefit Analysis41 Valuation issues and methods42 Benefit transfers43 Pair-wise comparison44 Cost-benefit analysis and behavioural economics45 Cost-benefit analysis in developing countries46 The value of time 47 Measuring the benefits of recreational areas48 Travel cost method49 Cost-benefit analysis and public health50 The value of statistical life51 Estimating the economic cost of air pollution on health52 Economic cost of diseases53 Cost-benefit analysis and the problem of locating environmentally noxious facilities (NIMBYs) - an informal discussion PART VIIIFurther notes and advanced materials 54 Cost-benefit analysis and the economistAppendix 1: Cost-effectiveness analysis Appendix 2: The alleged contradiction of the Kaldor-Hicks criterion Appendix 3: The problem of second-best Appendix 4: Origins of the Hicksian measures of consumer surplus Appendix 5: Marginal curve measures of consumer surplus Appendix 6: The concept and measure of rent Appendix 7: Marginal curve measures of rent Appendix 8: The limited applicability of property rights Appendix 9: Deadweight loss or love's labour lost Appendix 10: The value of human lifeAppendix 11: The rate of time preference Appendix 12: Selecting a set of investment projects for given political objectivesAppendix 13: Why cost-benefit analysis is useful for regulatory reformAppendix 14: Valuing household production