EC238 Lecture Notes - Lecture 6: Waste Treatment, Sensitivity Analysis, Risk Neutral
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Benefit-cost analysis (bca: bca is the public sector equivalent of profit-and-loss analysis for private firm, two differences b/w social benefit-cost analysis and private investment decisions, 1. Bca is a tool for helping to make public decisions, done from the standpoint of society in general rather than from that of a single profit-making firm: 2. Incorporates social valuation of all inputs and outputs related to the project whether or not they are transacted in private markets: challenge for bca is how to value non-market costs and benefits. I(cid:374) ca(cid:374)ada, bca has (cid:374)ot (cid:271)ee(cid:374) offi(cid:272)iall(cid:455) legislated for use (cid:271)(cid:455) go(cid:448)"t age(cid:374)(cid:272)ies at federal or provincial level. Specify clearly the project or program, including its scale and the perspective of the study: 2. Describe quantitatively the inputs and outputs of the program: 3. Estimate the social costs and benefits of these inputs and outputs: 4. Physical projects involve direct public production (ex. Regulatory programs aimed at enforcing environmental laws and regulations (ex.
