The Role and Application of Cost Benefit Analysis - Volume I: Generic Guidance
ISBN: 1 84057 455 0
This report presents generic guidance on the application of cost benefit analysis ("CBA") to water industry investment planning. The generic guidance is based on a five step approach to the application of CBA to water industry investment planning. This 5 step process for applying CBA to investment appraisal is summarised as:1) defining objectives, 2) establishing the baseline and investment options, 3) measuring costs and benefits, 4) analysing costs and benefits and 5) examining distributional impacts. The issues that will face water industry investment planners at each stage of applying CBA are examined, the appropriate analytical tools are identified and examples are used throughout to illustrate the application of those tools.
A second volume - report 07/RG/07/10 - presents guidance on the application of cost benefit analysis to the alleviation of sewer flooding risks. The guidance is intended to be consistent with, and complementary to the generic guidance in this report. In applying CBA to appraise investments to alleviate sewer flooding risks, a number of recommendations are made, especially with respect to the important task of estimating the monetary value of benefits.
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