Social Cost-benefit Analysis Research Articles

Efficient capacity allocation on deregulated railway markets

As railway markets are increasingly deregulated, coordinating and prioritising between capacity requests becomes more complex and more important. This paper describes the advantages and challenges of different allocation methods in vertically separated open-access railway markets, with several railway operators and heterogeneous traffic, and where a public infrastructure manager must resolve operators’ conflicting path requests. Three broad groups of allocation methods are described: administrative methods, allocation by social cost-benefit analysis and willingness-to-pay based allocation. We describe pros and cons of these allocation principles for three different market segments: commercial traffic with long planning horizons, (subsidized) traffic controlled by public transport agencies, and traffic with short planning horizons. We then outline an allocation process that meets the requirements of a deregulated market better than conventional methods. It is a mixed method, which uses an auction-like mechanism to allocate pre-defined paths to commercial operators on specified, capacity-constrained lines. The net social benefits of capacity reserved for traffic controlled by public transport agencies is assessed through social cost-benefit analysis of timetables. The benefits decrease when timetables are adjusted to make room for additional commercial train paths; the size of this loss determines the reservation price of the auction-like mechanism. Dynamic pricing is used for short-term allocation on congested line segments.

Did the restructuring of the electricity generation sector increase social welfare in Pakistan?

The power sector of Pakistan has undergone a substantial, yet protracted power sector reform program in 1992. Under this program, the government allowed participation of Independent Power Producers (IPPs), followed by the breakup of the Water and Power Development Authority (WAPDA) into various entities and the establishment of power sector regulatory authority, namely NEPRA in 1997. The power sector reforms in Pakistan have not been evaluated sufficiently to determine the actual costs and benefits incurred by different segments of the society, to correct the path of upcoming reforms. This study attempts to investigate the socio-economic impacts of restructuring of WAPDA's generation segment and private sector participation in the electricity generation sector of Pakistan by using a social cost-benefit analysis approach. The study has analyzed the impacts of reforms on government, private sector, and consumers (domestic, commercial, industrial and agriculture) of the power sector. The results have shown that the main benefit of private sector participation came from the timely expansion of generation capacity. However, environmental and electricity generation costs became exorbitant after power sector reforms. Consumers and government remained net losers, while IPPs were winners in the process of restructuring and privatization. This paper concludes that power generation sector reforms with private sector participation have impacted the overall social welfare adversely. It further concludes that had regulation been scrupulous with adequate supportive role of government with social obligations, consumers and government could have benefited from restructuring and privatization of the power sector generation sector in Pakistan.

Are commuter train timetables consistent with passengers’ valuations of waiting times and in-vehicle crowding?

Social cost-benefit analysis is often used to analyse transport investments, and can also be used for transport operation planning and capacity allocation. If it is to be used for resolving capacity conflicts, however, it is important to know whether transit agencies' timetable requests are consistent with the cost-benefit framework, which is based on passenger preferences. We show how a public transport agency's implicit valuations of waiting time and crowding can be estimated by analysing timetables, apply the method to commuter train timetables in Stockholm, and compare the implicit valuations to the corresponding passenger valuations in the official Swedish cost-benefit analysis guidelines. The results suggest that the agency puts a slightly lower value on waiting time and crowding than the passenger valuations codified in the official guidelines. We discuss possible reasons for this and implications for using cost-benefit analysis for capacity allocation. We also find that optimal frequencies are more sensitive to the waiting time valuation than to that of crowding.

Ecosystem service benefits and costs of deep-sea ecosystem restoration

Deep-sea ecosystems are facing degradation which could have severe consequences for biodiversity and the livelihoods of coastal populations. Ecosystem restoration as a natural based solution has been regarded as a useful means to recover ecosystems. The study provides a social cost-benefit analysis for a proposed project to restore the Dohrn Canyon cold water corals and the deep-sea ecosystem in the Bay of Naples, Italy. By incorporating ecosystem service benefits and uncertainties related to a complex natural-technological-social system surrounding restoration activities, the study demonstrated how to evaluate large-scale ecosystem restoration activities. The results indicate that an ecosystem restoration project can be economic (in terms of welfare improvement) even if the restoration costs are high. Our study shows the uncertainty associated with restoration success rate significantly affects the probability distribution of the expected net present values. Identifying and controlling the underlying factors to improve the restoration successful rate is thus crucial.

Estimation and use of recreational fishing values in management decisions.

In many countries, commercial and recreational fishing compete for access to marine resources. In some cases, recreational catch outweighs commercial harvest and may threaten species otherwise protected from commercial fishing. This has led to increasing calls for improved management of recreational fishing in the broader context of general fisheries management. As a result, fisheries managers face the challenge to decide how to allocate the available marine resources between competing uses. In this paper, we review and explain two common approaches that have been used to support recreational fishing allocation decisions. While economic activity analysis is an appropriate tool to assess how a change in resource allocation would affect regional economic activity(economic contributions and impacts), it is ill-suited to assess associated gains or losses in welfare of society as a whole (economic efficiency). Hence, economic activity analysis and social cost-benefit analysis complement each other, with each providing a different set of information answering a different set of questions. Unfortunately, both types of analysis use the term "economic value" suggesting that they are alternative approaches that provide the same information, whereas in fact they are not. If the objective of fishery managers is to ensure that society as a whole is made better off, the appropriate metric is economic value as defined by welfare economics. Under this definition, all goods and services provided by marine resources that are beneficial to humans have economic value. This includes non-use values such as the continued existence of an endangered marine species. The aim of this paper is to support managers and policymakers in allocating marine resources by reviewing relevant economic principles, concepts, and tools in the context of recreational fishing, including the use and challenges of estimating the non-market benefits generated by recreational fishing experiences.

Risk-informed land-use planning in the Indian context: A social cost-benefit analysis

Major chemical process accidents over the recent past decades have led to the formulation and enforcement of land-use planning (LUP) practices across many countries, so as to mitigate the public risk emanating from major chemical hazard installations. The present paper presents an approach to deciding land-use policy founded on integrated local risk-acceptance criteria and an attendant societal cost-benefit analysis. The application of the proposed approach is demonstrated by a case study of an example greenfield industrial facility for which the adjoining land is subject to strictures of LUP policy. The context is chosen to be that of India, which is an emergent economy that is beset with unique challenges for balancing land-use between agrarian and industrial use. The societal costs and benefits are computed employing macro-economic indicators; the former comprise opportunity cost of land restricted for development, while the benefit is comprised of the cumulative wealth generation due to economic development of the jurisdiction over the facility life time. The value of the benefit to cost ratio is found to be highest corresponding to a LUP based on a relatively relaxed risk acceptance criterion with As Low as Reasonably Practicable (ALARP) limits of 10−6–10−4/yr for public individual risk. The primary reason for this outcome is that, in comparison to a developed economy, land prices in India are relatively high vis-à-vis labour productivity and wages. This shifts the LUP choice towards the policy which involves least land-use restrictions against non-agrarian, commercial developments in the vicinity of major hazard installations. It is also demonstrated that if the per capita GDP values corresponded to those of developed economies, a LUP policy based on a more stringent risk acceptance criterion may be affordable for the society. An additional significant finding of the study is that the Value of Statistical Life of humans makes a relatively minor contribution to the societal cost-benefit analysis. Thus, its value as a determinant to LUP decision may be relatively limited. This essentially underscores the idea that the broader objective of LUP need be to simultaneously foster economic development and minimise human and other critical losses.

How can the concept of public value influence U.K. utility regulation?

There is much recent debate about extending the purposes of investor-owned firms to embrace the broader interests of a variety of stakeholders. Regulatory decisions in network industries already involve extensive use of centralised social cost-benefit analysis to capture some aspects of public value. A gap remains that might be filled by a decentralised process in which the regulator supports firms in expanding their purposes to include the pursuit of public value, identified by regulated firms in collaboration with consumers and citizens, and delivered in innovative and entrepreneurial ways. Based on a preliminary case study, we conclude that the approach has a role, but its success depends critically upon the companies fully embracing the revised purposes.

Social cost-benefit analysis of investment in rehabilitation of multipurpose small reservoirs in northern Ghana using an ecosystem services-based approach

Multipurpose small reservoirs are essential infrastructure in providing water for irrigation and non-irrigation uses in water stress areas of northern Ghana. Unfortunately, the flow of multiple ecosystem services from small reservoirs have been declining over several years due to lack of rehabilitation and poor management. Using selected multipurpose small reservoirs and available secondary and survey data, this paper applied an ecosystem services-based approach in the economic analysis of investment in rehabilitation of small reservoirs in northern Ghana. The findings reveal that private financial returns from irrigated crops have negative net present value (NPV) and an internal rate of return (IRR) lower than the cost of capital, implying a lack of economic incentive for private investors in their rehabilitation. However, accounting for the multiple ecosystem services such as livestock watering, fisheries, recreation services, domestic water, and climate regulation show positive NPV and high return on capital (IRR up to 43%). Policy choices would be biased against reservoir development if stakeholders consider only irrigation benefits. Based on the findings we recommend public investment in rehabilitation of multi-purpose small reservoirs to harness the multiple ecosystem services and community livelihoods. We further recommend public–private-user partnership business model to address current management inefficiency and optimize the flows of ecosystem services from small reservoirs to wider community.

Measuring the impact of electricity market reform in a Chinese Context

This paper draws on international experience to examine how the ongoing power sector reform (PSR) in China since 2015 should be measured and assessed. We proceed by reviewing some relevant international reform experience and then applying this to the Chinese context. Thus we focus on some of the extensive previous literature which has documented reforms in cross-country and in single country studies. We pay particular attention to the European Union (EU) single electricity market, which is the largest integrated electricity market in the world. We also look at a social cost benefit analyses of UK electricity market reforms and how these might applied in a given Chinese province. We go on to examine the actual price impact evidence from two leading provinces – Guangdong and Zhejiang – on the overall price effect and on exactly how those price effects have been achieved. We then offer some insights from the extensive regulatory reporting by leading regulators on market performance that is relevant to PSR in China based on excellent annual reporting from the UK, Australia and the US.

'What You See is All There is': The Importance of Heuristics in Cost-Benefit Analysis (CBA) and Social Return on Investment (SROI) in the Evaluation of Public Health Interventions.

Health economists are currently debating, with some suspicion, the relative merits of cost-benefit analysis (CBA), grounded in theoretical welfare economics, and the proliferation of social return on investment (SROI), a pragmatic approach of developing a triple-bottom line (social, environmental and financial), but not grounded in welfare theory. We argue, in rather existential terms, that there is a need to understand the role of heuristics, or prior beliefs, in current ‘best practice’ in CBA and SROI. A taxonomy of CBA and SROI is presented, which summarises the origins of the methods, reporting guidance, publication checklist of quality of reporting, who is wanting these analytical approaches, and policy decision rule present. We argue that a bottom-up SROI is best thought of as localised CBA, building stakeholder involvement right into the framing of SROI, perhaps addressing or mitigating the effects of prior heuristics in top-down CBA. Behavioural CBA and social CBA recognise that people are not rational and that sources of value other than willingness to pay may best reflect social values. Standardisation of SROI and comparison with CBA may illuminate the role of prior heuristics and seek to better reflect social value in weighing up the costs and benefits of public health interventions at both a local and societal level.

Investing in Science: Social Cost Benefit Analysis of Research Infrastructures, by MassimoFlorio (MIT Press, Cambridge, pp. 384, 2019)

Investing in Science: Social Cost Benefit Analysis of Research Infrastructures, by MassimoFlorio (MIT Press, Cambridge, pp. 384, 2019)

The Dasgupta Review deconstructed: an exposé of biodiversity economics

ABSTRACT The Dasgupta Review is the latest attempt at justifying financialisation of Nature, but also much more. It represents a high point in applying concepts of capital and wealth accumulation comprehensively to all aspects of human and non-human existence. Unravelling the flaws in the arguments, contradictions and underlying motives requires both understand of and cutting through the specialist language, neoclassical economic models, mathematics and rhetoric. We offer a critical guide to and deconstruction of Dasgupta’s biodiversity economics and reveal its real aim. Framing critical biodiversity loss as an issue of asset management and population size is a blind to avoid questioning economic growth, which remains unchallenged and depoliticized despite apparently recognizing natural limits. Dasgupta ignores long-standing problems with capital theory and social cost–benefit analysis. Rather than a scientific review of biodiversity economics he offers impossible to achieve valuation, based on old flawed theories and methods, embedded in an unsavoury political economy.

How does a nature-based solution for flood control compare to a technical solution? Case study evidence from Belgium

The strategy of reconnecting rivers with their floodplains currently gains popularity because it not only harnesses natural capacities of floodplains but also increases social co-benefits and biodiversity. In this paper, we present an example of a successfully implemented nature-based solution (NBS) in the Dijle valley in the centre of Belgium. The research objective is to retrospectively assess cost and benefit differences between a technical solution (storm basins) and an alternative NBS, here the restoration of the alluvial floodplain. The method is a comparative social cost–benefit analysis. The case study analysis reveals similar flood security, lower costs, more ecosystem services benefits and higher biodiversity values associated with the NBS option in comparison to the technical alternative. However, the business case for working with NBS depends substantially on the spatial and socio-ecological context. Chances for successful NBS implementation increase in conditions of sufficient space to retain flood water, when flood water is of sufficient quality, and when economic activity and housing in the floodplain is limited.

DETERMINATION OF THE COST COMPONENT IN THE SOCIAL COST-BENEFIT ANALYSIS OF ROAD PROJECTS IN SOUTH AFRICA

The article deals with the preferred approach to determine the cost component in the social cost-benefit analysis (SCBA) of road projects in South Africa. The article is in four parts. The first part, the introduction, provides the reasons why investment cost should be identified as a single cost entity in the SCBA of a road project, regardless of the criteria according to which a project is adjudicated. The second part discusses the principles that guide the determination of the social opportunity costs (SOC) of road projects. The third part identifies the two items that form the cost component of the SCBA of road projects; the SOC of (i) the land required to accommodate the road reserve, and (ii) the construction of the road. The cost component of the latter is sub-divided into labour, plant, equipment, fuel, materials, and normal profit. The section also details a recommended procedure to convert the financial budget of a road construction project to an estimate of its SOC. The fourth section draws some conclusions from the study.

A SOCIAL COST BENEFIT ANALYSIS OF “DOOR TO DOOR GARBAGE COLLECTION PROJECT”

Waste management is one of the major concerns of the developing countries today. The increase in population and the exploitation of all kinds of natural recourses without the inclusion of sustainable practices have added to generation of solid and hazardous waste endangering living beings and the ecosystem. More or less every country is putting effort to develop and maintain an effective mechanism for managing waste. In India, many states and cities including Assam have undertaken significant steps to address this issue. Sivasagar, a city in Upper Assam has recently joined this endeavor and is on its way of implementing certain projects. This study would focus on Social Cost Benefit Analysis of a project named “Door to Door Garbage Collection” recently implemented by Sivasagar Municipal Board. It is expected that the study would reveal relevant social cost and benefits to be considered while undertaking such kind of projects in developing nations

Cost benefit analysis of the Athens metro line 3 expansion project

Metro projects have become an essential infrastructure of modern large metropolitan areas worldwide, as they provide fast, reliable and efficient transportation services, promoting overall mobility, environmental stewardship and economic vitality. In order to assist the decision-making process of pursuing such high cost underground infrastructure, its assessment should not only be based in a purely financial evaluation. On the contrary, the implementation of a comprehensive social cost-benefit analysis incorporating the monetary values of the environmental and social benefits of underground transit systems is an important element to highlight latent qualities. The paper presents an ex-post cost benefit analysis focusing on the last segment of the Athens metro line 3 expansion, from Egaleo to Ag. Marina station. This section has been developed from 2007 and was put in service in 2014. The analysis incorporates actual cost figures from the construction period as well as the operational cost of the segment during the first years of operation. The project is assessed on the grounds of an investment plan using the social NPV and social IRR criteria. The results point out that the project is not feasible if benchmarked against purely financial criteria. Nevertheless, the introduction of the monetary values attained by the social and environmental benefits that the project brings, renders the whole development desirable and beneficial from a cost-benefit analysis standpoint.

Social Benefit Cost Analysis of Electric Bus Transit for Ahmedabad

This paper is an attempt to compute social benefit cost analysis (SBCA) for the proposed electric bus rapid transit system (e-BRTS) in Ahmedabad. Governments and urban local bodies in many countries including India are exploring the possibility of adoption of electric bus mobility with a view to promote green modes of transport. Electric bus rapid transit system is being envisaged for Ahmedabad and partial funding has recently been sanctioned by the Government of India for the purpose. This research focusses on the social benefit cost analysis of e-BRTS for the specific scale and context proposed for the city. Various components of benefits and costs to road users and agency have been identified and quantified. The present worth of these components has been calculated, which reveal a benefit cost ratio greater than unity for the case. The authors conclude that the electric BRTS has substantial societal benefits and may be viewed as a fruitful investment for the city. The implications of this study lies in communicating to the concerned government authorities and policy makers that e-BRTS is socio economically feasible and thereby need to be promoted by Government of India for meeting the goals of sustainable development.

Study of Social Cost Benefit Analysis for Biodiesel Conversion Project that Features Collaboration with Employment Support Facilities for People with Disabilities and their Local Government

Study of Social Cost Benefit Analysis for Biodiesel Conversion Project that Features Collaboration with Employment Support Facilities for People with Disabilities and their Local Government

국립과학수사연구원 법의관 부검에 관한 사회적 비용편익분석

국립과학수사연구원 법의관 부검에 관한 사회적 비용편익분석

Socio-Economic Feasibility Analysis for Sustainable Mass Rapid Transit Project in Western India

Sustainable public transport systems may be achieved by adopting electric bus locomotion. The problem being addressed by this research is the development and case application of a computation methodology of the social benefit cost ratio of an electric bus transport project in India and identification of whether it can significantly favour the situation of environment friendly transport. The underlying theory behind this approach is if the environmental and social dimensions of an infrastructure project are considered in addition to the financial dimensions for the purpose of project appraisal, a holistic evaluation can be achieved and such an evaluation can give an edge to the approval of environmentally friendly projects. The evaluation has been performed using the present worth analysis of various types of benefits and costs associated with the implementation of the electric bus rapid transit system in a city. The variables considered in the researched methodology are benefits which are revenue, savings in vehicle operating costs (VOC), environmental benefits, savings in travel time, reduction in accidents and non-consumption of fossil fuel, and costs which are infrastructure investment costs, cost of the bus fleet, maintenance cost, replacement costs, cost of system operation and maintenance and additional electric power generation. The outcome as indicated by the value of the social benefit-cost ratio (SBCR) illustrates that such projects can be positively justified from point of view of the benefits gained by the society as well as fruitful returns and value addition of infrastructure investment in the long run. The research contributes by validating that social benefit-cost analysis (SBCA) can be used for the evaluation of sustainable transport system appraisals in order to make their realisation more favourable.