ECO 4660. Benefit-Cost Analysis

Instructor: John Whitehead
e-mail:
whiteheadjc@appstate.edu

Fall 2009 | Calendar

Community Based Research Project

In this course teams of students will conduct a benefit-cost analysis of an off-campus project or policy following the basic steps of BCA. This course will integrate your academic work with a hands on application with the community. In this way, you get the opportunity to apply what you learn in class through a hands-on project. Your research will add a practical dimension to the course lectures and readings and you will have the opportunity to do some much needed analysis for agencies with limited resources. Plus, hands-on research is one of the best ways to learn economics.

Early in the semester, upon identification of a research topic and a willing client, students will participate in a scoping meeting with each client. Faculty and students will work collaboratively with community clients to discover what the needs of the community are and how students can help meet a particular need. Meetings between faculty, students and the community client will occur as needed throughout the semester.

In order to reflect on what you have learned from your experience, you will be required to produce (1) a nontechnical report for your client, (2) a technical report for your professor, (3) create a presentation for your client and (4) create a debriefing presentation for your classmates. The reports are due during on the last day of class. The client presentation will take place at an agreed upon time with the client. The class presentation will take place during the final exam period. Each of these is worth 40 points for a total of 160 points. Participation is worth another 40 points for a total of 200 points.

Grades will be based on adherence to sound BCA principles, completion of work and responsiveness to client needs. Your participation grade will be based on a one paragraph self-assessment of the effort that you made during the semester. Each self-assessment must be signed by each member of the group.

Report Guidelines

The draft report should include the 10 steps of a benefit-cost analysis.

Formatting:

The final report to the client should adopt some "fancy" formatting.

BCA Steps:

  1. Clarify issues of standing

  2. Identify the alternatives

  3. Set out assumptions

  4. List the impacts of each alternative project

  5. Assign values to these impacts

  6. Deal with unquantified impacts

  7. Discount future values to obtain present values

  8. Identify and account for uncertainty

  9. Compare benefits and costs

  10. Suggestions for future research

Presentation Guidelines

References

  1. Mangione, Thomas W., "The basics of question design," Chapter 2 in Mail Surveys: Improving the Quality, 1995 [PDF]
  2. Ettner, Susan L., et al., "Benefit–Cost in the California Treatment Outcome Project: Does Substance Abuse Treatment 'Pay for Itself'?" Health Services Research 41(1):192-213, 2006. [PDF and Erratum]
  3. Harless, David W. and Frank R. Allen, "Using the contingent valuation method to measure patron benefits of reference desk service in an academic library," College and Research Libraries 60(1), January 1999. (An example of a mini-BCA using a CVM study of students) [PDF]
  4. Rodman, Ruey L., "Cost analysis and student survey results of library support for distance education," Journal of the Medical Library Association 91(1) January 2003. (An example of an almost-BCA) [PDF]
  5. Whitehead, "A practitioner's primer on the CVM," Chapter 3 in Handbook on CVM, ed. by Alberini and Kahn, 2006. (tips on writing CVM questions) [PDF]
  6. Graham, REEP, 2007 [PDF].
  7. Hahn, Journal of Economic Perspectives, 1998 [PDF].
  8. Hahn and Dudley, REEP, 2007 [PDF].
  9. Noonan, Journal of Cultural Resources [PDF].
  10. Rose, et al., Natural Hazards Review, 2007 [PDF].

2009 Clients

  1. "One megawatt by 2012", Appalachian Institute for Renewable Energy, contact: Steve Owen [steveo at appcoalition.org]
  2. "Effects of Artist and Venue on Net Returns," Mountainhome Music, contact: Karen James [karenjames at skybest.com]
  3. "Economic Analysis of Parent to Parent Programs," Parent to Parent, contact: Karen Hayes [hayeskl at appstate.edu]