Introduction to Cost-benefit Analysis (Benefit Analysis Series)

Crawford School of Public Policy

How long?

  • 1 day
  • in person

What are the topics?

Crawford School of Public Policy

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Who should attend

This course is suitable for both beginners and as a refresher for those with an economics background.Simple mathematics of addition, subtraction, multiplication, and area of triangle (0.5 times the base and the height) will be used.

About the course

This series will develop your skills to confidently undertake a basic cost-benefit analysis or a project or policy, capably review repots prepared by consultants, and prepare regulatory impact statements.

A combination of essential concepts, case studies and practical exercises is used, without the use of mathematics. The series is suitable for both beginners and as a refresher for those with an economics background.

Course overview

A key feature of this course is an introduction to investment analysis using practical exercises such as the purchase of a house. Costs and revenues (benefits) are adjusted for inflation, for the time value of money (using discounting), for different project periods (using equivalent annual values), and for risk (using expected values, decision trees, and Monte Carlo analysis, which is increasingly used by commercial entities). Participants will conduct simple arithmetic calculations in shared learning experiences, and should bring a simple hand-held electronic calculator.

Session structure:

Basic investment analysis (a calculator is essential for practical exercises)

Timelines, flows of costs and benefits (revenues) Nominal and real values: adjusting for inflation Time value of money: compounding and discounting Discounting: adjusting for time Net present value

Basic investment analysis (continued)

  • Real versus nominal values in analysis
  • Using present value tables
  • Annuities
  • Comparing projects of different duration
  • Perpetuities

Basic investment analysis (continued)

  • Threshold analysis: Case Study
  • Types of discount rates
  • Adjusting costs and benefits for probability of incidence (risk)
  • Expected value and decision-tree analysis

Introduction to underlying principles of cost-benefit analysis

  • The Pareto and Kaldor-Hicks principles
  • Standing
  • Benefits, opportunity cost, transfer payments
  • Financial analysis versus cost-benefit analysis
  • Key steps in cost-benefit analysis

Methodology:

A combination of essential concepts, case studies and practical exercises is used, without the use of mathematics. The schedule is subject to alteration to suit participants’ particular interests.

Learning outcomes include:

  • Confidently undertake a basic cost-benefit analysis of a project or policy
  • Competently review reports prepared by consultants
  • Prepare regulatory impact statements

Experts

Kaliappa Kalirajan

Kaliappa Kalirajan is an applied economist and policy analyst. He received his Masters in Mathematical Economics from Madurai University (1970), Master of Letters in Econometrics from Madurai University (1973) and Doctor of Philosophy in Economics from the Australian National University (1979). ...

Introduction to Cost-benefit Analysis (Benefit Analysis Series) at Crawford School of Public Policy

From  1195 AUD$854

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