Outcome Of Cost-benefit Analysis Research Articles

An Australian perspective on real-life cost-benefit analysis and assessment frameworks for transport infrastructure investments

Cost-benefit analysis (CBA) is the most commonly used economic assessment tool for transport infrastructure investments. There are radically different approaches to its use across the world, highlighting the need for local research. While CBA is extensively reported on in many countries, an Australian perspective is less commonly found. This study aims to provide an Australian perspective on the use and efficiency of CBA in transport infrastructure investment assessments. It examines the guidelines used in practice and the CBA of real-life transport projects in relation to the costs and benefits considered in CBA and the CBA as a tool to inform investment decision making. This study identified the implications for wider CBA use, including the practical issues that should be addressed in guidelines and the challenges of implementing CBA outcomes in investment decision making. Improving CBA practices and assessments of transport infrastructure investments contributes to ensuring that investment decision making is well-informed.

Contradictory outcomes of cost-benefit analyses – Findings from Norwegian public-investment projects

This paper addresses the issue with contradictory outcomes of cost-benefit analyses (CBA) performed on the same project that can be seen in many Norwegian public-investment projects. Different stakeholders may order “their own” appraisals of a specific project, which sometimes conclude quite differently from the other appraisals. This phenomenon is explored by studying the appraisals performed on eight Norwegian public-investment projects. Each of the projects analysed have been subject to many appraisals, which have all been compared and analysed. The following research questions have been explored: (1) How may various appraisals of the same project differ? (2) How may clients be able to influence the results of the appraisals? (3) How may the challenge with differing results, technical bias and low transparency of the appraisals be addressed in order to help decision-makers evaluate the various outcomes of CBAs? The findings show that the appraisals did vary in the projects studied; for some of them, quite substantially. The differences between appraisals were mostly related to the benefit side of the projects, both regarding which types of benefits were quantified and how they were measured and monetised. Important project-specific assumptions also differed among the appraisals. The findings indicate that the clients ordering the appraisals may have impacted the outcome of the appraisals by, for example, impacting project specific assumptions and demanding certain methodologies and standards to be used when quantifying and valuing benefits. A CBA can never be a complete, objective description of the matters under consideration. However, it is crucial that the appraisals are transparent and report on important factors that have large impact on the results so that decision-makers can evaluate the various appraisals and are able to use the information from them in decision-making processes.

Nitrogen fertilizer management strategy for oil palm-maize intercropping system in the semi-deciduous forest zone of Ghana


 In an attempt to increase yield of maize in oil palm-maize intercropping system, farmers resort to indiscriminate cutting of fronds of palms leading to low yield of oil palm. This study evaluated the impact of different N fertilizer levels on maize varieties in oil palm-maize intercropping system. The economics of nitrogen application was also studied. The treatments were: T1-Sole oil palm, T2-Oil palm+‘Omankwa’, T3-Oil palm+‘Abelehi’ and T4-Oil palm+ ‘Obatanpa’. The crop associations were superimposed with nitrogen fertilizer levels as sub-treatments at N0- N0:P0:K0, N1-N60:P60:K60, and N2-N120:P60:K60 per ha. The experiment was a split plot design with 4 replications. There was no significant difference (p< 0.05) between maize varieties across seasons for both maize yield and aboveground biomass though ‘Omankwa’ was promising across seasons and more responsive to nitrogen application. Across the three maize varieties, N60P60K60 was significantly higher (p<0.05) by 40% and 17% for maize yield and aboveground biomass respectively as compared to N0:P0:K0. The study recommends N60P60P60 fertilizer level and further states that to improve fertilizer adoption, government should subsidize fertilizer cost for farmers to purchase. The outcome of cost benefit analysis revealed that return per cash invested favored cropping system with N60:P60:K60 and season with less water stress.

Crop management adaptations to improve and stabilize crop yields under low-yielding conditions in the Sudan Savanna of West Africa

Abstract Agriculture is a critical element of the West African Sudan Savanna’s economy and the main livelihood strategy for many people, where food insecurity and poverty are widespread. Low soil fertility, high intra and inter-annual rainfall variability together with limited ability to invest in new technologies are among the major constraints to the predominantly smallholder, rainfed crop production in the region’s mixed crop-livestock systems. We evaluated the effect of tillage practices (contour and reduced tillage), nitrogen fertilizer rates (no nitrogen -N0, recommended nitrogen -NREC and high nitrogen-N2REC) and residue management (improved and standard) on the yield of maize, cotton and sorghum for two landscape positions (upslope and footslope) for four growing seasons in three locations in the Sudan Savanna region of Burkina-Faso (Dano), Ghana (Vea) and Republic of Benin (Dassari). The studies aimed at assessing the potential of residue retention, tillage practices and nitrogen fertilization to (1) increase average yields and (2) stabilize yields under sub-humid conditions. Over the 4 year study period, across the 3 locations recommended N produced 17% higher crop yields than the N0 treatment. It was not worthwhile to double the recommended N as there was no yield benefit of applying more fertilizer. The results revealed no consistent interactions across sites except crop type and nitrogen fertilization. Stability analysis revealed that contour ridging was superior in stabilizing yield. Evaluation of the relative maize yield stability on different levels of nitrogen depicts variation and there is a tendency for an inverse relationship between mean yield of nitrogen levels and its relative yield stability since nitrogen application did not increase yield stability. The outcome of cost benefit analysis revealed that, return per cash invested favored non-degraded sites with cotton production and in years with favorable rainfall conditions. Thus, in the Sudan savanna of West Africa, it is economically risky to invest in mineral N fertilizers when cropping on degraded soils or when rainfall is expected to be erratic.

Does uncertainty make cost-benefit analyses pointless?

Cost-benefit analysis (CBA) is widely used in public decision making on infrastructure investments. However, the demand forecasts, cost estimates, benefit valuations and effect assessments that are conducted as part of CBAs are all subject to various degrees of uncertainty. The question is to what extent CBAs, given such uncertainties, are still useful as a way to prioritize between infrastructure investments, or put differently, how robust the policy conclusions of CBA are with respect to uncertainties. Using simulations based on real data on national infrastructure plans in Sweden and Norway, we study how investment selection and total realized benefits change when decisions are based on CBA assessments subject to several different types of uncertainty. Our results indicate that realized benefits and investment selection are surprisingly insensitive to all studied types of uncertainty, even for high levels of uncertainty. The two types of uncertainty that affect results the most are uncertainties about investment cost and transport demand. Provided that decisions are based on CBA outcomes, reducing uncertainty is still worthwhile, however, because of the huge sums at stake. Even moderate reductions of uncertainties about unit values, investment costs, future demand and project effects may increase the realized benefits infrastructure investment plans by tens or hundreds of million euros. We conclude that, despite the many types of uncertainties, CBA is able to fairly consistently separate the wheat from the chaff and hence contribute to substantially improved infrastructure decisions.

NEW SAFETY STANDARDS FOR COASTAL FLOOD DEFENCES IN THE NETHERLANDS

The Dutch government is in the process of revising its flood safety policy. The current safety standards for flood defences in the Netherlands are largely based on the outcomes of cost-benefit analyses. Loss of life has not been considered separately in the choice for current standards. This article presents the results of a research project that evaluated the potential roles of two risk metrics, individual and societal risk, to support decision-making about new flood safety standards. These risk metrics are already used in the Dutch major hazards policy for the evaluation of risks to the public. Individual risk concerns the annual probability of death of a person. Societal risk concerns the probability of an event with many fatalities. Technical aspects of the use of individual and societal risk metrics in flood risk assessments as well as policy implications are discussed. Preliminary estimates of nationwide levels of societal risk are presented. Societal risk levels appear relatively high in the South Western part of the country where densely populated dike rings are threatened by a combination of river and coastal floods. Options for the application of the individual and societal risk in the new flood safety policy are presented and discussed.

The Use of Individual and Societal Risk Criteria Within the Dutch Flood Safety Policy—Nationwide Estimates of Societal Risk and Policy Applications

The Dutch government is in the process of revising its flood safety policy. The current safety standards for flood defenses in the Netherlands are largely based on the outcomes of cost-benefit analyses. Loss of life has not been considered separately in the choice for current standards. This article presents the results of a research project that evaluated the potential roles of two risk metrics, individual and societal risk, to support decision making about new flood safety standards. These risk metrics are already used in the Dutch major hazards policy for the evaluation of risks to the public. Individual risk concerns the annual probability of death of a person. Societal risk concerns the probability of an event with many fatalities. Technical aspects of the use of individual and societal risk metrics in flood risk assessments as well as policy implications are discussed. Preliminary estimates of nationwide levels of societal risk are presented. Societal risk levels appear relatively high in the southwestern part of the country where densely populated dike rings are threatened by a combination of river and coastal floods. It was found that cumulation, the simultaneous flooding of multiple dike rings during a single flood event, has significant impact on the national level of societal risk. Options for the application of the individual and societal risk in the new flood safety policy are presented and discussed.

Cost-benefit analysis of influenza vaccination in a public healthcare unit.

Estimate the costs and benefits of influenza vaccination in a group of employees of an Italian District Health Authority, Unità Locale Socio Sanitaria (ULSS), to define a scheme of an economic evaluation to be used for other vaccination strategies. In an observational study conducted from December 2002 to April 2003, 107 ULSS employees, voluntarily vaccinated, were compared with 107 nonvaccinated ULSS employees matched for age, sex, and job category. The outcome of cost-benefit analysis was evaluated by checking personnel department records about absences from work and their causes, including influenza. Costs and benefits of the influenza vaccination from the ULSS point of view were calculated. The influenza vaccination strategy reduced absences from work by 23% and decreased the loss of working days by 30% and related cost. This difference is not significative. The ratio vaccination benefits/cost was euro4.2. The advantage of vaccination is confirmed by sensitivity analysis performed on the mean cost of a working day, which showed that the benefit-cost ratio ranged from euro4.5 to euro11.7. The results suggest that the influenza vaccination strategy in our sample of people was cost-saving. The economic evaluation used in this study could also be used for other vaccination strategies and in other settings.

Comparing the output of cost benefit and multi-criteria analysis: An application to urban transport investments

This work compares the outcome of Cost Benefit Analysis and a Multi-Criteria method when applied to a transport project. The Analytic Hierarchy Process was used, utilising two approaches to derive the weights. Results show that the outcome of the Multi-Criteria method did not match the one suggested by the Cost Benefit Analysis, but it did match the final decision by the authority. An important conclusion has to do with the relevance of incorporating other aspects into the assessment, apart from the economic ones. Furthermore, public opinion should be taken into account explicitly into the decision making, providing accurate and timely information about projects.

AIDS prevention in Japan and its cost benefit aspects

Since the acquired immunodeficiency syndrome (AIDS) in Japan is in the initial stage of its spread (the first case was reported in 1985, and cumulative cases numbered 21 as of September 1986), we estimated the magnitude of the imminent epidemic using Delphi technique, and analyzed economic performance of preventive health programs. The annual incidence predicted for the years 1988, 1991 and 1996 was 100, 450 and 950, respectively (Japanese population 120 million, calculated cumulative incidence for the initial 5 years 0.4/100000 in Japan, 10.8/100000 in U.S.A.), implying that the AIDS epidemic in Japan would be roughly one-thirtieth of that in the U.S.A. during the initial period. This conservative prediction can be explained by the following factors: the populations of homosexual men and drug abusers are far smaller than those in the U.S.A.; low seroprevalence among homosexual men (4% or less in Japan vs 37–67% in U.S.A.); the absence of buildup in AIDS incidence in the initial period. Preventive programs involve: (i) surveillance and education for hemophiliacs and homosexual men including counselling clinics run with strict confidentiality; (ii) education of physicians and the public, especially travellers to ‘high risk countries’; and (iii) screening of donated blood samples. The outcome of cost-benefit analysis appears to depend on the scale of blood donor screening program. Preventive programs focused on the counselling and education of homosexual men are highly cost-effective. On the other hand, if the screening of all the blood donors in Tokyo and other metropolitan areas is undertaken, the program is bound to yield a net loss under the predicted epidemiologic circumstances.