Cost-benefit analysis: concepts and practice

Cost-Benefit Analysis provides accessible, comprehensive, authoritative, and practical treatments of the protocols for assessing the relative efficiency of public policies. Its review of essential concepts from microeconomics, and its sophisticated treatment of important topics with minimal use of mathematics helps students from a variety of backgrounds build solid conceptual foundations. It provides thorough treatments of time discounting, dealing with contingent uncertainty using expected surpluses and option prices, taking account of parameter uncertainties using Monte Carlo simulation and other types of sensitivity analyses, revealed preference approaches, stated preference methods including contingent valuation, and other related methods. Updated to cover contemporary research, this edition is considerably reorganized to aid in student and practitioner understanding, and includes eight new cases to demonstrate the actual practice of cost-benefit analysis. Widely cited, it is recognized as an authoritative source on cost-benefit analysis. Illustrations, exhibits, chapter exercises, and case studies help students master concepts and develop craft skills.

Introduction to Cost-Benefit Analysis -- Conceptual Foundations of Cost-Benefit Analysis -- Microeconomic Foundations of Cost-Benefit Analysis -- Valuing Impacts from Observed Behavior : Direct Estimation of Demand Schedules -- Valuing Impacts in Output Markets -- Valuing Impacts in Input Markets -- Valuing Impacts in Secondary Markets -- Predicting and Monetizing Impacts -- Discounting Future Impacts and Handling Inflation -- The Social Discount Rate -- Dealing with Uncertainty : Expected Values, Sensitivity Analysis, and the Value of Information -- Risk, Option Price, and Option Value -- Existence Value -- Valuing Impacts from Observed Behavior : Experiments and Quasi-Experiments -- Valuing Impacts from Observed Behavior : Indirect Market Methods -- Contingent Valuation : Using Surveys to Elicit Information about Costs and Benefits -- Shadow Prices from Secondary Sources -- Cost-Effectiveness Analysis and Cost-Utility Analysis -- Distributionally Weighted CBA -- How Accurate Is CBA?