UEH Standard Programs

Cost-benefit analysis is a process of identifying, measuring and comparing the benefits and costs of an investment project, policy or program in order to provide informed recommendations for decision makers who are responsible for making scare resource allocation decisions in terms of economic efficiency. This is a useful tool for both private investors and government officers when making decisions under budget constraints. In this course, we will focus on projects - both private and public projects. Both types of projects need to be appraised to determine whether they represent an efficient use of resources. 

Projects that represent an efficient use of resources from a private viewpoint may involve costs and benefits to a wider range of individuals than their private owners. The complete set of project effects are often termed social benefits and costs to distinguish them from the purely private costs and revenues of the project. Therefore, social cost-benefit analysis is used to appraise the efficiency of private projects from a public interest viewpoint as well as to appraise all kinds of public projects. The role of cost-benefit analysis is to provide information on the level and distribution of costs and benefits of a project to decision makers. Ideally, the decision makers will use the results in accordance with other considerations for making better and smarter decisions. 

This course will provide students with a set of fundamental steps in a typical cost-benefit analysis such as identification of costs and benefits, quantification of costs and benefits, monetization of costs and benefits, tabulation of costs and benefits over the project timeline, discounting of the net benefit flow, calculation of evaluation criteria, risk assessment, and writing up the standard appraisal report. The striking feature of this course is to help students gain a comprehensive understanding of project appraisal from different points of view such as equity point of view, total investment point of view and social point of view. Therefore, any appraisal will fully include financial analysis, economic analysis, distributional analysis and risk analysis. Other conventional project appraisal courses are still missing. This is a computer-based course; therefore, students will have a chance to practice complicated real-life assignments to improve their analytical skills.