A Course on Cost Benefit Analysis

06 Dec 2013 - 08 Dec 2013 Gokarna Forest Resort, Kathmandu, Nepal

The South Asian Network for Development and Environmental Economics (SANDEE) organized a three-day course designed for researchers who want to strengthen their skills in conducting cost-benefit analysis to analyze environmental issues.

The course covered the underlying theory and techniques of benefit cost analysis to evaluate the trade-offs between environmental protection and economic development. Economic tools, nonmarket valuation and discounting were applied to quantify the social costs and benefits of development projects and determine their total economic value. Applications of these methods to specific environmental resources were discussed through in-class discussions. Numerical problems using excel spreadsheets provide hands-on experience in conducting cost-benefit analysis.

This course covered the following topics:
1. Conceptual Foundations to Cost-Benefit Analysis. Project appraisal (social versus financial). Marginal Analyses. Ranking of alternatives and decision rules
2. Discounting future benefits and costs. Choice of discount rates. Social discount rate.
3. Practical issues - inflation, scale of the project, timing, aggregation, project closure, adjusting for distortions and taxes (shadow prices)
4. Dealing with Uncertainty: Expected Values, Simulations, and Sensitivity Analysis
5. Equity vs. Efficiency
6. Sustainability and Cost Benefit Analysis
7. Total Economic Value
8. Willingness to Pay vs. Willingness to Accept
9. Cost-Effectiveness Analysis

Class sessions combine lectures, discussion, class exercises, presentations, and interactive work. A high level of participation is essential for successful completion of this course.

Course Instructor:

Dr. Madhu Khanna
Department of Agricultural and Consumer Economics
University of Illinois at Urbana-Champaign
USA

Course Annoucement Flyer

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