EC238 Chapter Notes - Chapter 6: Nominal Interest Rate, Discount Window, Scenario Analysis
Document Summary
Benefit-cost analysis is a tool for helping to make public decisions what policies and programs to introduce done from the standpoint of society in general rather than from that of a single profit- making firm. It incorporates social valuation of all inputs and outputs related to the project whether or not they are transacted in private markets. In canada, benefit-cost analysis has not been officially legislated for use by government agencies at the federal or provincial level. Involves measuring, adding up, and comparing all the benefits and all the costs of a particular public project or program. Scale and perspective of a bca project or program. Two primary types of public environmental programs for which benefit-cost analyses are done: Socially efficient scale maximizes the net social benefits from the project. Net social benefits are maximized where mac = md. When the mac and md curves are not identifiable, a procedure called sensitivity analysis is undertaken.
