The typical assumption about cash flows in perpetuity is not appropriate in practical project appraisal because the length of project life is always finite. In this paper, I present and discuss the calculation of multiperiod financial discount rates for a project with a finite life and no...

The paper presents a simplified social cost-benefit analysis approach tested on around thirty projects of small infrastructure in Croatia, and deals with some of the specific issues encountered in this field work. In Zadar and Sibenik– Knin counties, Croatia, a Sustainable Development Project...

In traditional cost-benefit analyses of public projects, every citizen’s willingness to pay for a project is given an equal weight. This is sometimes taken to imply that cost-benefit analysis is a democratic method for making public decisions, as opposed to, for example, political processes...

Cost-benefit analysis have been attacked by many critics because of its implicit ethical assumptions. The normative content of the method is at odds with the common attitude that economists should analyze how to reach given goals, while determination of the goals should be left to the...

Fragmentation and severe inequalities in health status, health infrastructure and services were among the major problems the Limpopo Provincial Government had to deal with when they took office in 1994. Hence, as part of an intensive program of legislative and policy development to reform the...

This paper uses the Kaldor-Hicks compensation principle to compute the present value (PV) of a non-marginal future event. Three theoretical results stand out: First, decreasing returns to capital create a wedge between the PV of future generations' willingness to pay (WTP) and the PV of their...

Standard cost-benefit analysis (CBA) does not take into account induced demand due to relocation triggered by infrastructure investments. Using an integrated transport and land-use model calibrated for the Stockholm region, we explore whether this has any significant impact on the CBA outcome,...

We modify a method recently suggested by Weitzman (2012, 2013) for determining a risk-adjusted social discount rate (SDR) term structure consistent with both the (augmented) Ramsey rule and the consumption-based CAPM. Using this approach we estimate SDR for transportation infrastructure...

High-Speed Rail (HSR) is designed for travelers with high value of time. HSR offer fast and reliable services and good possibilities for work during the journey. Surprisingly, these benefits of HSR investment proposals are often appraised by use of travel-time valuations of people who use...

There is much disagreement about the discount rate. The prescriptive approach derives the discount rate from utility functions, growth models and ethical considerations. The descriptive approach stresses the opportunity cost of capital, but struggles to define which market rates to average. Both...