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A Partial Review of Seven Official Guidelines for Cost-Benefit Analysis

Published online by Cambridge University Press:  27 March 2020

Peter Abelson
Peter Abelson*
Affiliation:
Applied Economics, Sydney, Australia, e-mail: pabelson@appliedeconomics.com.au
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Abstract

This paper reviews seven contemporary official guidelines to cost-benefit analysis (CBA) with respect to eight major cost-benefit issues drawing on the latest edition of the major CBA textbook for guidance, although not complete authority. The guidelines are those by UK Treasury, European Commission, U.S. Environmental Protection Agency, New Zealand Treasury, Infrastructure Australia, NSW State Treasury, and Victorian State Department of Treasury and Finance. The eight major issues discussed are the issue of standing, core valuation principles, the scope of CBA with reference to potential additional economic benefits, changes in real values over time, the marginal excess tax burden, the social discount rate, use of benefit-cost ratios, and treatment of risk. While all the guidelines are quality guides to CBA, the paper finds that there is room for improved discussion and practice at various points in each of these guidelines.

Keywords

additional economic benefitsbenefit-cost ratiosmarginal excess tax burdenreal valuesstandingsocial discount ratetreatment of riskwillingness to accept values.H34
Type
Article
Information
Journal of Benefit-Cost Analysis , Volume 11 , Issue 2 , Summer 2020 , pp. 272 - 293
Copyright
© Society for Benefit-Cost Analysis, 2020

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