- Code IDEC8088
- Unit Value 6 units
- Offered by Crawford School of Public Policy
- ANU College ANU College of Asia and the Pacific
- Course subject International and Developmental Economics
- Areas of interest Economics
- Academic career PGRD
- Prof Kaliappa Kalirajan
- Mode of delivery In Person
First Semester 2020
See Future Offerings
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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.
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.
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
- Assignment Topic Summary 10%
- Essay 45%
- Exam 45%
In response to COVID-19: Please note that Semester 2 Class Summary information (available under the classes tab) is as up to date as possible. Changes to Class Summaries not captured by this publication will be available to enrolled students via Wattle.
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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.
Boardman, AE, Greenberg, DH, Vining, AR & Weimer DL 2010, Cost-Benefit Analysis: Concepts and practice, 4th edn, Pearson Prentice Hall, New Jersey.
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>
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.
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- Student Contribution Band:
- Unit value:
- 6 units
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