Principles of Cost Benefit Analysis
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- Curriculum
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This course introduces the principles of cost benefit analysis and provides a clear structure for conducting or evaluating a cost benefit analysis.
The course begins by discussing what cost benefit analysis can be used for, in what kinds of situations it has been used in real life, and why it is preferred to some other methods for analysing whether a project should be implemented or not. It then moves on to introduce 10 steps for conducting a cost benefit analysis, and explains these steps carefully one by one. Examples and references to real life are provided throughout the course. Additionally, throughout the steps one particular example is followed through to provide some flesh to the story. After the steps, the course also discusses some shortcomings of the method and the importance of making policy recommendations after the analysis.
After the course the student should have a clear overview of cost benefit analysis and its possibilities, but also be aware of the shortcomings of the method. The student knows the structure or the cost benefit analysis and can use the structure to conduct their own analysis or evaluate an existing one.
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1
IntroductionAfter completing this lecture the student knows what the course is all about and what it includes.
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2
What is a cost benefit analysis?
After completing this lecture the student knows what cost benefit analysis is and why it is important from a social perspective
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3
Why use a cost benefit analysis?
After completing this lecture the student knows why using a cost benefit analysis is important from a social perspective and what are its strengths compared to some other measures for assessing whether projects should go ahead or not.
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4
What can cost benefit analysis be used for?
After completing this lecture the student knows in what kind of situations cost benefit analysis can be and has been used. The lecture provides examples of cost benefit analysis in different kinds of situations.
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5
Steps in a cost benefit analysis
After completing this lecture the student knows what a cost benefit analysis consists of, and has learned the steps involved in a cost benefit analysis.
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6
Define goal and objectives
After completing this lecture the student knows Step 1 in cost benefits analysis, defining the goal and objectives.
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7
Define alternative actions
After completing this lecture the student knows Step 2 in cost benefit analysis, defining the alternative actions to assess.
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8
Define spatial and temporal extent
After completing this lecture the student knows Step 3 in cost benefits analysis, specifying the spatial and temporal limits of the analysis and defining the stakeholders.
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9
Select measurements and measure all the elements
After completing this lecture the student knows Step 4 in cost benefits analysis, selecting and measuring the impacts.
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10
Predict outcome of impacts
After completing this lecture the student knows Step 5 in cost benefits analysis, predicting the impacts across space and time.
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11
Estimate the costs and benefits
After completing this lecture the student knows Step 6 in cost benefits analysis, estimating the impacts in monetary terms.
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12
Apply discounting
After completing this lecture the student knows Step 7 in cost benefits analysis, applying discounting to future costs and benefits.
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13
Aggregate the costs and benefits
After completing this lecture the student knows Step 8 in cost benefits analysis, aggregating the costs and benefits and calculating the indicators.
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14
Perform sensitivity or uncertainty analysis
After completing this lecture the student knows Step 9 in cost benefits analysis, undertaking sensitivity and uncertainty analyses.
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15
Identify the best actions and provide recommendations
After completing this lecture the student knows Step 10 in cost benefits analysis, identifying the best actions and making a policy recommendation.
