Economic Evaluation Of Projects Research Articles

A Stated Choice Experiment: Value of Travel Characteristics in the Context of Attica

In the Attica region valuations of travel time are required, to be used for modeling purposes and economic project evaluation within the scope of the Metro Development Study. To estimate the impact of price and travel time changes on ridership and road use, a stated choice experiment has been designed, executed and analyzed in 1996. The market segmentation approach foresees different categorical response models by trip purpose, vehicle availability class and income group. The model results suggest a notable variation in time valuation by trip purpose, a value of time increasing with the income, and a high transfer disutility.

NEW FRONTIERS IN PROJECT EVALUATION?: A COMMENT ON DEVARAJAN, SQUIRE, AND SUTHIWART-NARUEPUT

Readers might infer from the paper by Devarajan, Squire, and Suthiwart-Narueput and from Hammer's applications of that methodology to health projects, that the authors are proposing fundamental modifications of the standard techniques and of received theory of cost-benefit analysis (otherwise known as applied welfare economics and in some uses as social or economic project evaluation). Such an inference is not warranted, however. So far as I can see, nearly everything the authors propose fits quite easily within the inherited corpus of applied welfare economics. The steps that they advocate are modifications not of standard cost-benefit analysis, but of habits that have developed over the years and decades both in the World Bank and quite generally among practitioners of economic project evaluation. Hammer nicely summarizes Devarajan, Squire, and Suthiwart-Narueput's main prescription: there should be a firm rationale for public involvement if a project is to be done in the public sector; the project should be compared with a clear counterfactual; the fiscal impact of the project should be clearly identified and should be assigned a properly estimated cost; and the issue of fungibility of funds should be clearly addressed in weighing the economic consequences of project loans.

Methodologies for economic and financial analysis

This paper reviews the methodologies for economic evaluation of projects in the belief that R&D projects can be evaluated and ranked on the basis of their expected benefits.

Economic Project Evaluation, Part 1: Some Lessons for the 1990s

Abstract: As countries reduce the size and extent of policy-induced distortions in their economies, the proper accounting for such distortions becomes just one among many aspects of economic project evaluation rather than its main purpose. Matters neglected in the past thus assume greater importance, such as the proper treatment of expected future changes in relative prices, and improving our calculation of expected benefits and costs through assigning probabilities to alternative future outcomes. It is also time to recognize the shortcomings of distributional weights (especially weights that decline exponentially with income) for cost-benefit analysis. The alternative schema of “basic needs externalities” is shown to be far less vulnerable. Special topics of interest for future work are: (a) the fact that there is now far less reason than earlier to turn to calculations in terms of border prices (which are often cumbersome and stilted); (b) the fact that the use of time preference rates to discount benefits and costs has vast implications for the analysis of current (in addition to capital) expenditures; (c) the proper accounting for externalities in cases where public-sector projects compete with or even displace similar private-sector operations; and (d) the appropriate ways in which cost-benefit analysis can be adapted in cases where pure economic efficiency is not the sole objective.

Financial and economic evaluation of projects with special reference to the electrical power industry (Tutorial)

Financial and economic evaluation of projects with special reference to the electrical power industry (Tutorial)

Financial and economic evaluation of projects with special reference to the electrical power industry

This tutorial is concerned with project evaluation and feasibility. It systematically works through the issues involved, referring whenever possible to the real world of the electrical power industry. However, the analysis can equally apply to all major engineering projects. The author considers the evaluation of costs and benefits, financial and economic returns calculation, sensitivity analysis and risk analysis.

COMPUTER‐BASED COURSEWARE FOR SYSTEMS ENGINEERING EDUCATION AND TRAINING

AbstractSystems engineering is an integration activity which is difficult to teach by conventional means alone. Education and training efforts should be supported with computer‐based courseware to augment textbooks, technical articles, case studies, and other written materials. The purpose of this paper is twofold: to describe the approach adopted at Virginia Tech in the instruction of systems engineering courses and to describe the development and utilization of computer‐based courseware in these courses. While this courseware is applicable in teaching systems engineering generally, three academic courses and their continuing education counterparts will be featured as examples. These courses are: The Systems Engineering Process, Logistics Engineering, and Economic Evaluation of Projects.

Economic evaluation of leadtime reduction

Many companies have systematically worked on controlling and reducing leadtimes and have achieved impressive improvements. Further reduction of leadtime by such companies can only be achieved by relatively expensive projects. In this paper the economic evaluation of such projects is discussed. Two important requirements for an economic evaluation of a project proposal for leadtime reduction are presented. The first requirement is to carefully analyse the consequences of leadtime reduction. A team that analyses the consequences should represent a variety of business functions, e.g. marketing, production, logistics and engineering. The second requirement is to use the right kind of economic criterion. This criterion should be based on future cash flows caused by the leadtime reduction. It will be demonstrated that product costs are inappropriate to evaluate the economic consequences of leadtime reduction. This suggests that a decision about leadtime reduction should be made at the organisational level where managers are responsible for profits, not just for product costs.

Project cost sensitivity and variability analysis

Sensitivity analysis is commonly used in project economic evaluation. It is a non-probabilistic technique used for the evaluation of risk variables. Despite its inherent deficiencies, it can be profitably adapted for project cost sensitivity analysis. The technique is further enhanced by introducing a measure of cost variability over a feasible cost range. A case example is given to demonstrate the calculation of the cost sensitivity index and coefficient of variation to measure the level of cost risk associated with key estimating variables using a cost modelling approach.

The economic evaluation of projects with special reference to developing regions∗

The economic evaluation of projects with special reference to developing regions∗

Economic evaluation of projects: A critical comparison of a new world bank methodology with the UNIDO and the revised OECD approach

The discussion on the evaluation of development projects which seemed more or less to have come to an end at the beginning of the 1970s, has experienced an unexpected revival. Following the publication of the revised version of the OECD Manual by Little and Mirrlees, a new methodology for project evaluation has been developed by the World Bank. The reason behind this is the growing need for differentiated but, at the same time standardized project evaluation methods which include distribution effects involving the poorest 3/5th of the population which have hardly been touched by 20 years of development policy and development assistance. The study focuses on this new World Bank approach by Bruce, van der Tak and Squire, the revised OECD approach by Little and Mirrlees, and the UNIDO guidelines by Dasgupta, Marglin and Sen. The three theoretical concepts are compared and their different methods approaches are then illustrated on the basis of a case study, a dam project in Nepal. Finally, the three approaches are subjected to a critical appraisal in the light of the demands of project evaluation in practice. The three approaches put different emphasis on the social value of consumption, of public and private investment, and distribution effects, and formulate correspondingly different formal evaluation criteria. As the case study shows, the evaluation results are similar. However, a number of crucial problems are not explicitly considered. The main reason for this is the denial of the multidimensionality of each evaluation problem by reducing it to the one-dimensional criterion of economic efficiency, which is defined differently in the three approaches. This has further technical implications as to the lack of clarity regarding the impact of value judgments on different stages of the calculation process on the final outcome. On the other hand, the tool of project evaluation is overburdened with policy decisions which must be taken at higher levels of political decision-making, such as basic decisions on priority sectors, export promotion versus import substitution, or private versus public investment and consumption.

A graphic method for the financial programming and economic evaluation of projects

An original graphic method is developed which, starting from the investment expenditure time chart, allows the user to carry out a medium-term financial programming through the representation of the various capital sources. The method also provides simultaneously two different indications concerning the profitability of the projects. By way of example, the method is applied to the case of a 160 MW thermal power plant.