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The objective of Cost-Benefit Analysis is to provide decision-makers with information about the social value of government-sponsored programs, projects and policies, so that they can allocate resources in a way that improves the well-being of society as a whole. The course covers the key concepts and tools that are essential for the evaluation of government activity by applying cost-benefit techniques, including under conditions of uncertainty. Case studies are employed to give students the confidence and insights required to undertake their individual assignment. Alternative decision-making approaches will also be presented to provide a perspective on the advantages and disadvantages of cost-benefit analysis.
Learning Outcomes
Upon successful completion, students will have the knowledge and skills to:
On successful completion of this course, students will have:
- a solid understanding of the basic rationale and techniques for applying cost-benefit analysis to government-sponsored programs, policies and projects.
- the ability to plan and implement a cost-benefit study;
- the ability to understand and critique a cost-benefit study prepared by someone else.
Other Information
Topics
Week 1 - Overview and conceptual issues
Week 2 - Microeconomic underpinnings
Week 3 - Valuing benefits and costs
Week 4 - Time preference and net present value
Week 5 - Social discount rates
Week 6 - Valuation of impacts
Week 7 - Valuing impacts from observed behaviour
Week 8 - Valuing impacts using stated preference
Mid-term test: to be notified
week 9 - Shadow pricing
week 10 - Risk and uncertainty
week 11 - Uncertainty and options
week 12 - Alternative evaluation approaches and distributional issues
week 13 - Revision of selected issues
Indicative Assessment
- Assignment Topic Summary 10%
- Essay 45%
- Exam 45%
The ANU uses Turnitin to enhance student citation and referencing techniques, and to assess assignment submissions as a component of the University's approach to managing Academic Integrity. While the use of Turnitin is not mandatory, the ANU highly recommends Turnitin is used by both teaching staff and students. For additional information regarding Turnitin please visit the ANU Online website.
Workload
The IDEC 8088 course involves attendance at a weekly lecture of three hours (including a half hour break), plus a weekly tutorial of one hour. Tutorial times and venues will be determined in the first week of the semester.
Prescribed Texts
Boardman, AE, Greenberg, DH, Vining, AR & Weimer DL 2010, Cost-Benefit Analysis: Concepts and practice, 4th edn, Pearson Prentice Hall, New Jersey.
Preliminary Reading
The main text for the course is Boardman, AE, Greenberg, DH, Vining, AR & Weimer DL 2010, Cost-Benefit Analysis: Concepts and practice, 4th edn, Pearson Prentice Hall, New Jersey.
Cost Benefit Analysis covers a broad range of topics, so that a single text may not cover all relevant material. Supplementary material will therefore be used in the course. The following texts contain additional material that will be useful for some sections of the course, especially if students wish to explore a specific topic in more detail. A Reading Brick is also available.
Department of Finance and Administration 2006, Handbook of Cost-Benefit Analysis, Financial Management Reference Material no. 6, Commonwealth of Australia, Canberra. <http://www.finance.gov.au/publications/finance-circulars/2006/docs/Handbook_of_CB_analysis.pdf>
Gramlich, EM 1990, A guide to Benefit-Cost Analysis, Prentice-Hall, New Jersey.
Luskin, D & Dobes, L 1999, Facts and furphies in benefit-cost analysis: transport, Research Report 100, Bureau of Transport Economics, Canberra. Downloadable at <http://www.bitre.gov.au/publications/1999/report_100.aspx>
Mishan, EJ & Quah, E 2007, Cost Benefit Analysis, 5th edn, Routledge, Oxford.
Pearce, DW & Nash, CA 1981, The social appraisal of projects. A text in Cost-Benefit Analysis, Macmillan, London.
Perkins, F 1994, Practical Cost Benefit Analysis, Macmillan Education, South Melbourne.
Sinden, JA & Thampapillai, DJ 1995, Introduction to benefit-cost analysis, Longman Australia, Melbourne. http://library.anu.edu.au/record=b2520009
Zhuang, J, Liang, J, Lin, T, & De Guzman, F 2007, Theory and Practice in the Choice of Social Discount Rate for Cost-Benefit Analysis: a Survey, ERD Working Paper 94, Asian Development Bank, Manila. Downloadable <http://www.adb.org/sites/default/files/pub/2007/WP094.pdf>
Assumed Knowledge
IDEC 8088 is designed specifically for Masters level students. IDEC Graduate Diploma students should enrol under the course code IDEC 8001. Non-IDEC students should seek advice from their own area before enrolling in either course.
Fees
Tuition fees are for the academic year indicated at the top of the page.
If you are a domestic graduate coursework or international student you will be required to pay tuition fees. Tuition fees are indexed annually. Further information for domestic and international students about tuition and other fees can be found at Fees.
- Student Contribution Band:
- 2
- Unit value:
- 6 units
If you are an undergraduate student and have been offered a Commonwealth supported place, your fees are set by the Australian Government for each course. At ANU 1 EFTSL is 48 units (normally 8 x 6-unit courses). You can find your student contribution amount for each course at Fees. Where there is a unit range displayed for this course, not all unit options below may be available.
| Units | EFTSL |
|---|---|
| 6.00 | 0.12500 |
Course fees
- Domestic fee paying students
| Year | Fee |
|---|---|
| 2016 | $3660 |
- International fee paying students
| Year | Fee |
|---|---|
| 2016 | $4878 |
Offerings, Dates and Class Summary Links
ANU utilises MyTimetable to enable students to view the timetable for their enrolled courses, browse, then self-allocate to small teaching activities / tutorials so they can better plan their time. Find out more on the Timetable webpage.
Class summaries, if available, can be accessed by clicking on the View link for the relevant class number.
First Semester
| Class number | Class start date | Last day to enrol | Census date | Class end date | Mode Of Delivery | Class Summary |
|---|---|---|---|---|---|---|
| 3677 | 15 Feb 2016 | 26 Feb 2016 | 31 Mar 2016 | 27 May 2016 | In Person | N/A |
