Social Cost-benefit Analysis Research Articles

An assessment of economic viability of jatropha plantation in North East India

PurposeThis paper aims to analyze the economic viability of jatropha plantation in North East India.Design/methodology/approachEconomic viability is measured through the net present value and the benefit–cost ratio (BCR) at four different production standards along with four different prices of jatropha seed.FindingsAt a very low price and small production, jatropha plantation is economically not feasible. However, when the price of seed increases from INR 5 to 8, BCRs become greater than 1, provided that the discount rate is less than equal to 8 per cent. The minimum threshold of BCR indicates that the threshold of 1.5 BCR at a production level of 1.5 tons/ha can be achieved with a combination of seed price of INR 10 per kg and a discount rate of 1 to 3 per cent. Thus, jatropha cultivation is economically viable but not highly profitable.Research limitations/implicationsPresent study analyzes the economic viability of jatropha plantation from purely financial point of view. Social cost and benefit of energy crop plantation is not included in the study. This suggests to adopt social cost–benefit analysis to evaluate the overall feasibility of plantation crops in future studies.Originality/valueThis paper contributes to the academic literature of economic viability of energy plantation crops. Economic viability of jatropha plantation is shown in different cost and revenue conditions with statistical evidences.

PRINCIPLES OF SOCIAL COST-BENEFIT ANALYSIS OF PUBLIC ROAD PROJECTS FOLLOWED IN SOUTH AFRICA

This article discusses the most pertinent principles that underlie the preferred social cost-benefit analysis methodology to evaluate public road projects in South Africa. The ‘cost’ component of the analysis is the once-off investment cost sacrificed to establish a facility, and the ‘benefit’ component is the recurring reduction of disutility emanating from the operation, maintenance, and use of a facility. To determine future road-user benefits, the article develops a social surplus criterion that is termed ‘socio-economic user surplus’. A procedure is provided of the way that social cost-benefit analysis should be supplemented by the application of equity weighting, with a view to indicating both the expected allocative efficiency and distributive efficiency of a proposed road project. Lastly, the article discusses why the economic impacts that may stem from economically justified road projects are not considered in a social cost-benefit analysis.

Social return on investment for community-based alcohol consumption control program during Buddhist Lent

Purpose The purpose of this paper is to evaluate the cost and benefit of a community-based alcohol consumption control program during the Buddhist Lent (BL) period in terms of social return on investment (SROI). Design/methodology/approach The research team evaluated the program in four selected villages from four regions using standard SROI. Relevant stakeholders were involved in the evaluation design and program impact map construction. Data, including costs, were collected from literatures, official documents, stakeholder interviews and focus group discussions. Alcohol abstinence and related data during and after the 2015 BL period were gathered from a survey questionnaire. The SROI ratio presented the social benefits compared against the total social investment. Findings The program was effective in producing a greater social value (2.7–5.9 times) than the cost of investment in every village. Cost savings from alcohol consumption constituted a major proportion of the program’s value. Originality/value The community-based alcohol consumption control program during BL can provide value for investment. Information from this study can be used by policy makers in their decision to continue or scale up the program. The SROI approach mainly relies on stakeholders that may present a bias; however, further study such as social cost-benefit analysis could provide additional insights.

The Historical Evolution of Alternative Metrics for Developing Countries’ Food and Agriculture Policy Assessment

The demand for quantitative assessments of the impacts of food and agricultural policies has grown steadily in the past four decades. From the application of social cost-benefit analysis to investments in developing countries in the 1970s to the use of increasingly sophisticated general equilibrium models today, the menu of available techniques for policy assessment has expanded rapidly. In addition, both partial and general equilibrium models have been developed to analyze world markets for agricultural commodities and the effects of government policies on such markets. Alongside the modeling of markets and the quantitative impact of policies, several indicators have been developed that build on trade policy measures, including effective protection and tariff equivalents. One example is the producer subsidy equivalent. This has been used by the OECD to estimate the level of support provided by government policies to the agricultural sector. The indicators have more recently been applied to developing countries as a form of benchmarking to give a snapshot of the transfers among stakeholders inherent in such policies.

Sustainability Framework for Assessing Urban Freight Transportation Measures

Abstract The salient scope of this paper is to enable the knowledge and understanding of urban freight transportation and provide guidance for implementing sustainable policies and measures in a city. To achieve this goal, an evaluation framework for city logistics policies and measures is developed, which demonstrates the complexity of urban freight transportation systems, through selected performance indicators, taking into account divergent stakeholders’ interests, conflicting business models and operations. Evaluation follows a hierarchical process; sustainability disciplines (economy and energy, environment, transportation and mobility, society), applicability enablers (policy and measure maturity, social acceptance and users’ uptake), multiple criteria and indicators, capturing the lifecycle impact of policies and measures and multiple stakeholders. Apart from the multicriteria context, the framework embeds methodologies, including, Impact Assessment, Social Cost Benefit Analysis, Transferability and Adaptability, and Risk Analysis. To demonstrate its applicability a case study is set for the City of Graz assessing the establishment of an Urban Consolidation Center. Results show that there is an overall improvement of 2.2% in the Logistics Sustainability Index when comparing before and after implementation cases of the Urban Consolidation Center.

Evaluating Regulatory Impact Assessments in Education Policy

Benefit–cost analysis is an important part of regulatory decision-making, yet there are questions as to how often and how well it is performed. Here we examine 28 Regulatory Impact Assessments performed by the federal government on education regulations since 2006. We find many Regulatory Impact Assessments estimated costs, albeit using informal methods, but most failed to adequately report benefits. Also, most studies did not estimate net present value or clearly report methodological assumptions. In reviewing the relatively high quality studies we identified a number of discrepancies from best practice. Most importantly, few Regulatory Impact Assessments attempted a social benefit–cost analysis: Most examined “administrative burdens” from compliance with legislation. This alternative focus on administrative burdens has significant implications for economic evaluation in practice.

A study on probabilistic social cost–benefit analysis to introduce high-efficiency motors into subway station ventilation

As a solution to enhance the air quality for public health while reducing energy consumption, introduction of high efficiency motors with inverters enabling variable speed operation of subway station ventilation systems has been proposed. However, as the initial costs for these alternative systems are around eight times more than those for conventional fixed speed systems, a comprehensive feasibility analysis should be conducted. Previous analyses focused on economic benefits based on predetermined loads for ventilation. As such, the various social benefits that are dynamically determined according to energy saving resulting from variable speed operation could not be determined. This research presents a probabilistic social cost-benefit analysis model. The ventilation systems’ operational loads are mainly affected by particulate matter concentrations; these can be predicted through probabilistic simulation of previous weather data. The probabilistically analyzed energy saving influences the social benefits i.e. fuel reduction, carbon dioxide reduction, and air pollutant reduction. The proposed analysis model is validated with real world data obtained from the operation of underground subway station ventilation systems in which synchronous reluctance motors (SynRM), a type of high efficiency variable speed motor, and inverters are installed by the authors.

Foodborne Parasitic Diseases in Europe: Social Cost-Benefit Analyses of Interventions

Social cost-benefit analysis (SCBA) can be used to evaluate the benefit to society as a whole of a particular intervention. Describing preliminary steps of an SCBA for two foodborne parasitic diseases, echinococcosis and cryptosporidiosis, indicates where data are needed in order to identify those interventions of greatest benefit.

Integrated Model of Computable General Equilibrium and Social Cost Benefit Analysis of an Indian Oil Refinery: Future Projections and Macroeconomic Effects

Cost benefit analysis (CBA) has long been used as a useful tool to appraise and evaluate the value of a range of investment projects to a society. Certain aspects of this method such as the appropriate discount rate is an important concern, because the choice of discount rates deeply affect the valuations of future income streams. Other aspects concerning financial flows and appropriate ‘shadow prices’ have also received considerable attention. However, when a megaproject with the character of a ‘universal intermediate’ is considered, its multiplier effects may be wide-ranging and permeate several economic and social layers and may be captured only in the aggregates. This study examines the costs and benefits of Vadinar refinery in Gujarat with a focus on this welfare dimension on society for the project. The framework explores a methodological breakthrough in CBA studies. In constituting the macroeconomic effects of expansion of the mega oil refinery, the wider economic impact (WEI) is estimated using the computable general equilibrium (CGE) model and incorporated into the CBA. This assimilation of CBA with macroeconomic externality obtained from the CGE model framework is perhaps only one of its kind in economic analysis of major infrastructure projects of any country. CBA when combined with CGE as an analytical tool can be gainfully employed to appraise or evaluate large scale projects like oil refineries. JEL Classification: B41, C51, C52, C53, C54, C55, D50, D58, D60, D61, D62, H23, H43, L71, O22, Q43

A Social Benefit Cost Analysis of Special Economic Zones in India: A Study of Noida SEZ

Special economic zones (SEZs) in India have been in news due to their usefulness vis-à-vis adverse effects on economy. A good number of opponents opine that costs incurred by SEZs outweigh the benefits. However, it cannot be denied that SEZs have played a positive role in the welfare of the economy. Thus, to examine this issue, we carried out a social benefit–cost analysis (SBCA) on Noida Special Economic Zone (NSEZ) within the context of enclave model for the period of 2009–2016. The result shows the positive net present value and benefit–cost ratio greater than one under methodological assumptions. This infers that NSEZ is contributing towards the welfare of Indian economy. One interesting findings of the study is that NSEZ is generating positive gains to economy with the absence of various market distortions which could otherwise reduce the realised benefits. Hence, need arises to eliminate such distortions from outside area of economy also to make it competitive at global level. Therefore, it can be concluded that competitiveness of the Indian economy can be enhanced with the removal of market distortions and liberalisation of rules, regulation and policies for economic development activities. Hence, the Government of India should emphasise and make regulations and policies that encourage competitiveness of the industries. JEL Classification: D04, D61, F13, H2, J01

Social cost benefit analysis of tobacco control policies in the Netherlands

Social cost benefit analysis of tobacco control policies in the Netherlands

The socio-economic impact of a breakthrough in the particle accelerators’ technology: A research agenda

Preliminary evidence on the long-run trajectory of the accelerator industry suggests that it may be close to the maturity phase of its cycle. If this is the case, how can we measure the benefits of an uncertain breakthrough in acceleration technology? Who are the main stakeholders interested by such a breakthrough? We identify these subjects and sketch some avenues for answering these questions. We thus present a model for the social Cost–Benefit Analysis (CBA) of research infrastructures and illustrate the results of its implementation for assessing the benefits of accelerators in basic science and hadrontherapy. Lastly, we move from the social CBA of single research infrastructures to modeling a major change in the accelerator technology and hence in the industry. A research agenda on the potential impacts of a technological breakthrough is presented.

A social cost benefit analysis of grid-scale electrical energy storage projects: A case study

This study explores and quantifies the social costs and benefits of grid-scale electrical energy storage (EES) projects in Great Britain. The case study for this paper is the Smarter Network Storage project, a 6 MW/10 MWh lithium battery placed at the Leighton Buzzard Primary substation to meet growing local peak demand requirements. This study analyses both the locational and system-wide benefits to grid-scale EES, determines the realistic combination of those social benefits, and juxtaposes them against the social costs across the useful lifecycle of the battery to determine the techno-economic performance. Risk and uncertainty from the benefit streams, cost elements, battery lifespan, and discount rate are incorporated into a Monte Carlo simulation. Using this framework, society can be guided to cost-effectively invest in EES as a grid modernization asset to facilitate the transition to a reliable, affordable, and clean power system.

A Methodological Note for the Development of Integrated Aquaculture Production Models

Aquaculture production can yield significant economic, social and environmental effects. These exceed the financial costs and benefits aquaculture producers are faced with. We propose a methodology for the development of integrated production models that allow for the inclusion of the socio-economic and environmental effects of aquaculture into the production management. The methodology develops on a Social Cost-Benefit Analysis context and it includes three parts: i) environmental, that captures the interactions of aquaculture with the environment, ii) economic, that makes provision for the incorporation of economic determinants in the production models and iii) social, that introduces the social preferences to the production and management process. Alternatives to address data availability issues are also discussed. The methodology extends the assessment of the costs and benefits of aquaculture beyond pure financial metrics and beyond the quantification of private costs and benefits. It can also support the development of integrated models of aquaculture production that take into consideration both the private and the social costs and benefits associated with externalities and effects not appropriately captured by market mechanisms. The methodology can support aquaculture management and policies targeting sustainable and efficient aquaculture production and financing from an economic, financial, social and environmental point of view.

Social Cost-Benefit Analysis of HL-LHC

We present a Social Cost–Benefit Analysis (CBA) of the High Luminosity upgrade of the Large Hadron Collider (HL-LHC), assessing its economic costs and benefits up to 2038. The Net Present Value (NPV) of the HL-LHC project is positive at the end of the observation period. The ratio between incremental benefits and incremental costs of the HL-LHC with respect to continue operating the LHC under normal consolidation (i.e. without high-luminosity upgrade) is slightly over 1.7, meaning that each Swiss Franc invested in the HL-LHC upgrade project pays back approximately 1.7 CHF in societal benefits. Simulations based on 50000 Monte Carlo rounds show that there is a 94% chance to observe a positive NPV (i.e. a quantifiable economic benefit for the society). The attractiveness of CERN for Early Stage Researchers (ESR) is key for a positive CBA result. Given that benefits to ESRs are the single most important societal benefit, CERN should invest more in activities facilitating the transition to the international job market. Technological spillovers are another very important ingredient in the CBA evaluation of CERN research infrastructures. Relations with firms in the supply chain and development of Information and Communication Technologies (ICT) are strategic levers CERN should use to boost these social benefits. Cultural effects, especially those related to onsite visitors, have a great development potential for generating societal benefits. This part needs to be quantified in greater detail to understand, how this benefit potential can be further increased efficiently in cooperation with the host states.

Friends or foes? Monetized Life Cycle Assessment and Cost-Benefit Analysis of the site remediation of a former gas plant

Site contamination is a global concern because of the potential risks for human health and ecosystem quality. Every contaminated site has its own specific characteristics and the increased availability and efficiency of remediation techniques makes the choice of remediation alternative increasingly complicated. In this paper an attributional Life Cycle Assessment (LCA) of the secondary environmental impacts of a site remediation is performed and its results are monetized using two different monetization techniques, namely Stepwise 2006 and Ecovalue 08. Secondly, we perform a social Cost-Benefit Analysis (CBA) on the same case study using the same data sources. The case study used in this paper entails the soil and groundwater remediation of a tar, poly-aromatic hydrocarbons (PAH) and cyanide contamination of a school ground by a former gas plant. The remediation alternative chosen in this case study is excavation with off-site thermal treatment of the contaminated soil. The outcome of the social CBA, stating that the remediation project is socially beneficial in the long term, is critically compared to the outcome of the different LCA monetization methods. This comparison indicates that monetized LCA is a good complement to social CBA when it comes to the assessment of secondary environmental impacts. Combining the two methods provides decision makers with a more extensive and detailed assessment of the soil remediation project.

The design of a Social Cost-Benefit Analysis of preventive interventions for toxoplasmosis: An example of the One Healthapproach.

Toxoplasma gondii infections cause a large disease burden in the Netherlands, with an estimated health loss of 1,900 Disability Adjusted Life Years and a cost-of-illness estimated at €44 million annually. Infections in humans occur via exposure to oocysts in the environment and after eating undercooked meat containing tissue cysts, leading to asymptomatic or mild symptoms, but potentially leading to the development of ocular toxoplasmosis. Infection in pregnant women can lead to stillbirth and disorders in newborns. At present, prevention is only targeted at pregnant women. Cat vaccination, freezing of meat destined for undercooked consumption and enhancing biosecurity in pig husbandries are possible interventions to prevent toxoplasmosis. As these interventions bear costs for sectors in society that differ from those profiting from the benefits, we perform a social cost-benefit analysis (SCBA). In an SCBA, costs and benefits of societal domains affected by the interventions are identified, making explicit which stakeholder pays and who benefits. Using an epidemiological model, we consider transmission of T.gondii after vaccination of all owned cats or cats at livestock farms. To identify relevant high-risk meat products that will be eaten undercooked, a quantitative microbial risk assessment model developed to attribute predicted T.gondii infections to specific meat products will be used. In addition, we evaluate serological monitoring of pigs at slaughter followed by an audit and tailor made advice for farmers in case positive results were found. The benefits will be modelled stochastically as reduction in DALYs and monetized in Euro's following reference prices for DALYs. If the balance of total costs and benefits is positive, this will lend support to implementation of these preventive interventions at the societal level. Ultimately, the SCBA will provide guidance to policy makers on the most optimal intervention measures to reduce the disease burden of T.gondii in the Netherlands.

Enhancing the environmental performance of industrial settlements: An economic evaluation of extensive green roof competitiveness

This paper evaluates the private and social costs and benefits of adopting an extensive green roof as opposed to a cool roof in an existing industrial building in Trieste (North-Eastern Italy). The evaluations from social and private viewpoints both consider costs and benefits of refurbishments, energy consumption, and maintenance. From the social side, the externalities derived from green or cool roofing, such as aesthetic aspects, biodiversity preservation and natural habitat provision, carbon reduction, air quality improvement, and hydrological aspects, are monetized using cost-benefit transfer approaches. The first analysis result is the poor convenience of adopting a green roof compared to a cool one from the private investor's viewpoint. The second finding is the positive net present value of the social cost-benefit analysis for the green roof compared with the cool roof, due to the positive externalities of the former. Monetization of externalities allows calculating the economic incentives needed to promote the spread of green roofing in the Mediterranean area. Consequently, two different types of incentives are proposed: direct contribution for refurbishment intervention and annual reduction of local property tax. A final sensitivity analysis using the Monte Carlo method is performed on intrinsic and random variables, defined by triangular or uniform distributions. The probability evaluation of economic affordability is provided from the private investor's viewpoint, first considering private costs and benefits and, second, introducing the financial incentives for balancing the public benefits provided by an extensive green roof.

Making ‘Make in India’ a green development project: A social cost-benefit analysis

‘Make in India’ is an initiative program of the Government of India to encouragemultinational and domestic companies to manufacture their products in India. It is aninternational marketing strategy, conceptualised by the Prime Minister of India, Sh. NarendraModi, to transform India into a global manufacturing hub. In this study, an effort has been madeto analyse this new investment project of Indian government. The main focus of the study is ondoing a social cost- benefit analysis of the ‘Make in India’ project. The benefits that Indianeconomy and Indian people will get, and also the costs in terms of natural environment thatwould be affected by this project, are discussed under this study. The inflow of foreigninvestments in India in the form of setting up of new manufacturing units will bring countlessbenefits for its people and economy as a whole, but at the same time they will certainly bringwith them several hidden costs that risks Indian natural environment resulting in deterioratedpeople’s health and ecological scarcities. India cannot afford such hidden costs as it alreadyrank slow (112th) on Social Progress Index as far as the Environmental Quality is concerned(Source: http://www.socialprogressimperative.org/). This social cost- benefit analysisconcentrates on identifying such hidden social and environmental costs of ‘Make in India’project and finally providing some suggestions/recommendations so that ‘Make in India’ canbecome a remarkable step in promoting a transition to a green economy.

Investments projects in natural gas distribution in Italy: A model of social cost-benefit analysis

The territory of Italy is divided into 177 distribution areas each of them will be auctioned. The regulation of these tenders requires to integrate the economic and technical offers with specific social cost-benefit analyses (CBA) proving the benefits of the different proposed investments in natural gas distribution facilities. This paper proposes an original method to carry out such a social cost-benefit analysis taking into account the different typologies of investments and namely projects to connect new customers, projects to increase security of supply, projects to improve service quality and finally investments to reduce the risk of severe accidents. An overall formula is also proposed in order to account for the possible combinations of the projects mentioned above.