Students examine projects that are commonly evaluated using benefit-cost analysis, and the appropriate methods for determining their cost effectiveness. Topics include project evaluation techniques; measuring welfare change; correcting for market distortions using shadow wages and prices; finding the appropriate discount rate; making valid valuations that incorporate inflation and appropriate planning horizon, scrap, and spillover and secondary effects; public enterprise pricing rules; valuing intangibles; and incorporating risk and uncertainty. Case studies of projects are analyzed from a variety of areas, such as natural resources, the environment, human resources, public service, and transportation. Prerequisite: ECON 1900
Students examine projects that are commonly evaluated using benefit-cost analysis, and the appropriate methods for determining their cost effectiveness. Topics include project evaluation techniques; measuring welfare change; correcting for market distortions using shadow wages and prices; finding the appropriate discount rate; making valid valuations that incorporate inflation and appropriate planning horizon, scrap, and spillover and secondary effects; public enterprise pricing rules; valuing intangibles; and incorporating risk and uncertainty. Case studies of projects are analyzed from a variety of areas, such as natural resources, the environment, human resources, public service, and transportation. Prerequisite: ECON 1900
