Where to Use Cost Effectiveness Techniques Rather Than Cost Benefit Analysis

Cost Benefit Analysis, and the measures of economic performance that can be derived from it (see Note 6: When and How to Use NPV, IRR and Adjusted IRR), is the preferred method for demonstrating the economic justification of transport investments....

Full description

Bibliographic Details
Main Authors:	Mackie, Peter, Nellthorp, John, Laird, James
Format:	Brief
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AGRICULTURAL DEVELOPMENT BASIC ACCESS BASIC ACCESS ROADS BASIC ROAD ACCESS BETTER ACCESS TO MARKETS CLEAN DRINKING WATER COMPOSITE MEASURE COST BENEFIT COST BENEFIT ANALYSIS COST EFFECTIVE ANALYSIS COST EFFECTIVENESS COST-EFFECTIVENESS DATA AVAILABILITY DATA COLLECTION DEVELOPING COUNTRIES DISTRICT TRANSPORT MASTER PLANNING PROCESS EARTH ROADS ECONOMIC ANALYSIS ECONOMIC DATA FOOTBRIDGES FRAMEWORK GRAVEL HIGHWAY PROJECTS INCOME LIVING STANDARDS LOW VOLUME RURAL ROAD MEANS OF TRANSPORT MONETARY TERMS MULTI CRITERIA ANALYSIS PARTICIPATORY PLANNING PATH PATHS POLICY MAKERS POOR POOR DISTRICTS POOR PERSON POOR RURAL DWELLERS POPULATION GROUPS POVERTY ALLEVIATION POVERTY CRITERIA POVERTY REDUCTION PUBLIC RESOURCES QUANTITATIVE DATA RATE OF RETURN ROAD AXIS ROAD CLASS ROAD ENGINEERING ROAD IMPROVEMENT ROAD NETWORK ROAD QUALITY ROAD TRANSPORT ROUGHNESS ROUTES RURAL RURAL ACCESS RURAL ACCESS PROJECT RURAL ACCESS ROADS RURAL AREAS RURAL BASIC ACCESS ROAD RURAL COMMUNITIES RURAL ROAD SYSTEMS RURAL ROADS RURAL TRANSPORT RURAL TRANSPORT INFRASTRUCTURE SAVINGS SOCIAL DEVELOPMENT SOCIAL IMPACTS SOCIAL INFRASTRUCTURE SPEED SPOT IMPROVEMENT TARGETING TERRAIN TRAFFIC TRAFFIC LEVEL TRAFFIC LEVELS TRANSPORT TRANSPORT ECONOMICS TRANSPORT PROJECTS TRANSPORT SERVICES TRIPS VEHICLE OPERATING VEHICLE OPERATING COSTS VEHICLES VILLAGE TRACK VILLAGE TRANSPORT VILLAGE TRANSPORT NETWORK WEATHER ROAD ACCESS WEIGHTING SCHEME
Online Access:	http://documents.worldbank.org/curated/en/2005/01/6374272/use-cost-effectiveness-techniques-rather-cost-benefit-analysis http://hdl.handle.net/10986/11795

Description
Summary:	Cost Benefit Analysis, and the measures of economic performance that can be derived from it (see Note 6: When and How to Use NPV, IRR and Adjusted IRR), is the preferred method for demonstrating the economic justification of transport investments. Such an approach, however, relies on the ability to be able to measure costs and benefits in monetary terms (see Note 5: Framework), which renders it problematic for projects where the majority of benefits cannot be readily monetised. Such a project could be a Low Volume Rural Road (see Note 21: Low Volume Rural Roads). In such situations consideration should be given to the use of measures derived from cost effectiveness or weighted cost effectiveness (also known as Multi Criteria Analysis) techniques as the basis for the decision regarding whether to invest or not. Cost effectiveness techniques are also a very useful tool for project screening or ranking. Such a screening process ensures that projects that are subjected to a more detailed analysis (including cost benefit analysis) are those that best fit with the objectives of the investment (e.g. poverty alleviation). Section 1 of this note outlines the situations in which cost effectiveness techniques should be used, whilst Section 2 describes the two main types of approaches. Section 3 discusses the issue of economic viability and cost effectiveness whilst Section 4 presents a summary of recommendations.

Where to Use Cost Effectiveness Techniques Rather Than Cost Benefit Analysis

Similar Items