Economic evaluation of public projects (Cost-Benefit Analysis)

This course aims to give the students knowledge about the economic welfare theory that is the basis for the use of CBA. The course starts with a discussion of welfare economics and its influence on the use of CBA. Moreover basic concepts such as Pareto optimality and social welfare functions are discussed. Thereafter various ways to measure the effects on producers, consumers and factor suppliers are introduced. The exercise that the students are expected to work with during the course is also handed out at this stage. In the second half of the course the focus is on the practical problems that are connected to the use of CBA. In this part the effects of market interventions and market failures as well as uncertainty, lack of information and distributional aspects are discussed. Furthermore, the use of discounting as a way to account for the fact that benefits and cost occur at different periods in time is discussed.