ECO 4660. Benefit-Cost Analysis

Department of Economics
Appalachian State University

Fall 2009 | Calendar

TR 11:00-12:15, Raley Hall 3013

Instructor: John Whitehead
Raley Hall 3094
Office Hours: MW 9-11, 2-4; appointment, open door
Phone: 262-6121 (office), 262-2148 (department)
Fax: 262-6105

Last Update: 09/19/2009

Catalog Description

The study of the evaluation of competing public policy alternatives. The purpose of benefit-cost analysis is to inform government decision-making and facilitate the more efficient allocation of scarce resources. This course introduces the basic theory and principles of benefit-cost analysis and examines applications of the methodology. Prerequisite: ECO 2030.

Learning Objectives

Learning objectives are to (1) develop a theoretical understanding of benefits and costs and their comparison and (2) develop a practical understanding of (1) through community-based research projects.


A Primer for Benefit-Cost Analysis, Richard O. Zerbe, Jr. and Allen S. Bellas, Edward Elgar, 2006.


The grades are based on two exams and the group project. Each exam is worth 150 points. The group project is worth 200 points. The maximum number of points is 500. Final grades will be assigned as follows:

Grade A A- B+ B B- C+ C C- D+ D D- F
% 92 90 88 82 80 78 72 70 68 62 60 below 60
Points 460 450 440 410 400 390 360 350 340 310 300 below 300


There are two in-class exams and an oral final exam administered during the final exam period (i.e., class presentation). A university excused or emergency absence is usually necessary to schedule a make-up exam.

Service-Learning Project Description

This is a service learning and community-based research course. Small groups of students will conduct benefit-cost analyses of client projects. Data collection, analysis, written reports and oral presentations are required. The project grade will be based on a group presentation and an individual paper. More detail can be found at the project page.

Note: What is plagiarism?

Course Outline

Classroom Community Readings Assignment
Introduction Group meeting with client to discuss project Zerbe and Bellas, Ch 1; Ross, Chapter 7; OIRA Reports to Congress Attend ACT Service Learning Orientation Session
Foundations Group meeting with professor Zerbe and Bellas, Ch 2; Stoecker, Chapter 2 Research proposal (report and PPT)
Standing Group meeting with client to present research proposal Zerbe and Bellas, Ch 3 Determine standing
Welfare Economics Group meeting with professor Zerbe and Bellas, Ch 4 Develop theory
Valuing Inputs Group meeting with professor Zerbe and Bellas, Ch 5 Data Collection
Valuing Outputs Zerbe and Bellas, Ch 6
Nonmarket Valuation Group meeting with professor Zerbe and Bellas, Ch 7; Dumas, Schuhmann and Whitehead [AFS 2005].
Discounting and NPV Group meeting with professor Zerbe and Bellas, Ch 9 Data Analysis
Risk and Uncertainty Group meeting with professor Zerbe and Bellas, Ch 10 Report Writing
Class Presentations Client Presentations   ACT course evaluation


Class Attendance: From the catalogue: "It is the policy of Appalachian State University that class attendance is considered to be an important part of a student's educational experience. Students are expected to attend every meeting of their classes, and are responsible for class attendance."

Classroom behavior: The following classroom behaviors are not acceptable: excessive and/or loud chatting with other students, disruptive coming and going, answering your cell phone and other annoying behaviors.

Academic Integrity: As a community of learners at Appalachian State University, we must create an atmosphere of honesty, fairness, and responsibility, without which we cannot earn the trust and respect of each other. Furthermore, we recognize that academic dishonesty detracts from the value of an Appalachian degree. Therefore, we shall not tolerate lying, cheating, or stealing in any form and will oppose any instance of academic dishonesty.  This course will follow the provisions of the Academic Integrity Code, which can be found on the Office of Student Conduct Web Site:

Accommodations for Students with Disabilities: Appalachian State University is committed to making reasonable accommodations for individuals with documented qualifying disabilities in accordance with the Americans with Disabilities Act of 1990, and Section 504 of the Rehabilitation Act of 1973. Those seeking accommodations based on a substantially limiting disability must contact and register with The Office of Disability Services (ODS) at or 828-262-3056. Once registration is complete, individuals will meet with ODS staff to discuss eligibility and appropriate accommodations.

ASU Office Hours Policy: Every full-time faculty member is required to be available seven (7) hours per week during the regular academic year to consult with students. Requirements for part-time faculty will be prorated according to the number of hours taught. Each department will maintain an office hours policy that establishes standards regarding a mix among formal office hours, meetings in other locations, and electronic communications appropriate for faculty members and curricula in that department. A schedule indicating the times available for formal office hours, meetings in other locations, and electronic communications must be posted on the faculty member's office door, listed on course syllabi, and provided to the departmental office at the beginning of each semester. Electronic communication addresses, URLs, and/or phone numbers must be listed on course syllabi and also provided to the faculty member's departmental office. During the term of a summer session in which a faculty member teaches, office hours expectations are half of those during the regular academic year.

Last Update: 09/19/2009