Cost-Benefit Analysis: Theory and Application

by Tevfik F. Nas

Overview

Drawing on the principles of welfare economics and public finance, this second edition of Cost-Benefit Analysis: Theory and Application provides the theoretical foundation for a general framework within which costs and benefits are identified and assessed from a societal perspective. With a thorough coverage of cost-benefit concepts and their underlying theory, the volumecarries the reader through the steps of a typical evaluation process, including the identification, measurement, and comparison of costs and benefits, and project selection. Topics include alternative measures of welfare change, such as the concepts of consumer surplus and compensating and equivalent variation measures, shadow pricing, nonmarket valuation techniques of contingent valuation and discrete choice experiment, perspectives on what constitutes a theoretically acceptable discount rate, the social rate of time preference, income distribution, and much more. The book also focuses on real-world applications of cost-benefit analysis in two closely related areas—environment and health care—followed by an examination of the current state of the art in cost-benefit analysis as practiced by international agencies.

Product Details

ISBN-13:	9781498522519
Publisher:	Lexington Books
Publication date:	07/29/2016
Sold by:	Barnes & Noble
Format:	eBook
Pages:	252
File size:	3 MB

About the Author

Tevfik F. Nas is professor of economics at the University of Michigan-Flint.

Table of Contents

1. Introduction
2. Efficiency Norm: Pareto Optimality
3. Economic Efficiency and the Market Mechanism
4. Economic Efficiency and Public Goods
5. Economic Efficiency in the Presence of Externalities
6. Collective Decision Making
7. Principles of Cost-Benefit Analysis
8. Allocational Effects of Public Projects
9. Measuring Costs and Benefits
10. Nonmarket Valuation
11. Investment Criteria and Project Selection
12. The Choice of Discount Rate
13. Income Distribution as an Evaluation Criterion
14. Applications of Cost-Benefit Analysis
15. Evaluation Issues in Environmental Studies
16. Evaluation Studies: Health Care
17. CBA in a Developing Country Context

Editorial Reviews

4 Stars! from Doody

This book provides a thorough introduction to cost-benefit analysis (CBA). The book first reviews the public finance and microeconomic foundations of CBA. The next seven chapters cover the fundamental tools of CBA. The book concludes by reviewing applications of CBA to the environment, health care, and developing countries. The book is written as a text on CBA for undergraduate students in economics, public administration, and public policy. It may also be suitable for master's programs in related fields. Although the brevity of discussion on some topics may necessitate supplementation with other texts, the book provides a comprehensive introduction to the terminology and techniques of CBA. The book is geared toward people who have a basic training in economics. Although some health practitioners may appreciate getting a better grounding in the theoretical underpinnings of CBA, the book may not provide sufficient guidance or examples to all individuals interested in performing CBA. The writing style is clear, focused, and succinct. Useful graphs illustrate a number of points, although the brief discussion of each graph may limit the accessibility to all readers. The discussion of each topic includes a number of relevant references. Each chapter concludes with a set of discussion questions that would be useful for classroom discussion. This book provides a very useful overview of CBA. It will be most helpful for persons who have some background in microeconomics or the ability to understand concepts from an economic perspective. Although one chapter is devoted to applications in healthcare, the attention devoted to cost-effectiveness analysis and cost utility analysis (which areused more frequently than CBA in the evaluation of healthcare programs) is limited, so other sources may be more practical for many researchers in the health sciences.

Sally C. Stearns

Writing for social directors and therapists, Thurman (theater, Northwestern U.) and Piggins (Director, Creative Education Associates) have compiled over 50 introductory group activities for older adults to stimulate the senses, awaken the imagination, activate body movement, and stimulate communication. The material grew out of workshops conducted in Illinois in response to the isolation and loss evidently experienced by the elderly. Includes session plans, objectives, lists of materials required, and evaluation methods. Annotation c. Book News, Inc., Portland, OR (booknews.com)

Booknews

Nas has been able to accomplish a difficult task – providing an understandable welfare economics foundation for those new to the subject and enough detail to make sure that these individuals are able to apply CBA to complex allocation problems such as climate change policy. All policy makers should read the book to better understand the power of CBA to address efficiency in exchange, production and allocation.

Wade Martin

Benefit-Cost analysis is one of the most powerful economic tools for improving efficiency in government spending, but it is too little known and understood by both citizens and government decision-makers. In this second edition of his important book, Tevfik Nas provides a highly readable overview of the theory and method of selecting public investments that provide the largest return for taxpayers and the general population. The applications are particularly useful as illustrations of the potential of the benefit-cost approach.

Henry Levin

"As an introduction to the concepts underlying cost-benefit analysis, this volume is well-written and comprehensive. It could be used profitably in an undergraduate course or in courses on evaluation where students have at least some understanding of economics."

Henry M. Levin