Essays /

16 Cba Essay

Essay preview

Hand-out 16: CBA & COBA
Specification
Cost-benefit analysis – the need for a cost-benefit approach for allocating resources and its application. Negative and positive externalities associated with transport use. Limitations of a cost-benefit approach.

Key Concepts

You need to be able to:
Explain the positive and negative externalities that arise from transport use Analyse the methods economists use to put a value on externalities Evaluate how effective methods of valuing externalities are

Explain how CBA / COBA is calculated
Evaluate the limitations of CBA / COBA
Externalities
Positive externalities, benefits to third parties:
relocation of businesses to areas around transport infrastructure reduced costs for local businesses due to increased speed
increased employment for workers
increased economic growth (accept growth of FDI)
local multiplier effects (accept benefit to local businesses) quicker commuting journeys OR increased productivity
increased frequency of trains / flights / buses
improvements in quality of service OR a more reliable service

Negative externalities, costs to third parties:
pollution;
noise;
accidents;
blight;
stress;
congestion

What is CBA?
CBA is used to assess the viability of transport infrastructure projects and helps to compare and prioritise schemes in that it tries to weigh up all...

Read more

Keywords

000 10 100 1000 15 16 180 2 2.2 20 2010 2011 2012 2013 250 4 4.7 5 5.05 50 500 5000 70 8 a11 abl accept accid accuraci addit ahead airport alloc ambul analys analysi applic apprais approach area aris around assess associ attach averag basi basic benefit blight blight/pollution bn build buse busi bypass calcul campaign car cash cba chang check choic coba collect commut compar compens concept conduct congest consid construct consum cost cost-benefit costs/benefits could creat crew data date decis defin depend determin dft differ difficult discount discuss done doubl drop due e.g earn econom economist effect effici eg employ error estat estim evalu expans expens explain extern factor fall fdi figur flight forecast frequenc gain glaze go good govern growth hand hand-out heathrow help hour hous human identifi ie impli improv inaccur includ incorrect increas incur inefficient/misallocation infrastructur intang invest jan join journey judgement june key l1 l2 l3 life lifetim limit link local london look loss lost made make maker mark may meant measur method model moment monetari motorist motorway multipli need negat net new nhs nois norfolk norwich number numer often one output outweigh overal paper parti particular past penc place polici pollut posit possibl pressur price prioritis privat produc product project properti propos public put qualiti quasi quasi-publ question quicker rail rate reduc reliabl reliev reloc remov resid resourc road salaries/ambulance scarc scare scheme see servic shadow social space specif speed stress subject suffer term thetford third time topic total town traffic train transport treat tri tripl trunk two uk ultim upon use user valu viabil victim view wage wage/salary way weigh weight welfar whether word work worker would wrong year