Distance learning Unit (IEM).
Aims: The aim is to advance student understanding of the economic principles and analytical techniques behind CBA, and best practises in conducting cost benefit analysis.
Learning Outcomes:
After successfully completing this unit students should be able to outline the economic principles underlying CBA and distinguish environmental CBA from traditional financial project appraisal. They should also be able to describe the rationale underlying each of the economic valuation techniques; outline the methodology of each technique and identify the main short comings associated with them. They should also be able to describe the economic basis of, and employ the investment decision criteria utilised by CBA; outline the issues associated with the choice of discount rate and identify the limits of environmental CBA. Finally, the students should be able to describe how the results of a CBA should be reported.
Skills:
This distance learning unit develops skills in self study, and use of spreadsheets.
Content:
Introducing CBA; financial project appraisal; willingness to pay and opportunity costs as measures of economic value; market imperfections (e.g. public goods and externalities); shadow pricing; total economic value; techniques employing actual market prices, surrogate market techniques, survey based techniques; determination of cash flows and investment criteria; discount rates; limitations of CBA; presenting and reporting CBA.
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