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What Are Left Underestimated Using Cost-Benefit Analysis For Public Project Evaluation?

Author

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  • Jurgita Baranauskiene
  • Valdemaras Makutenas
  • Albina Novosinskiene

Abstract

Public projects don’t generate enough income to be financially justified, but create social benefits. Every project should be evaluated in order to make the investment decision. The cost-benefit analysis is a common method for public project evaluation, but this method does not fully comply with the basic concept of public projects. This theoretical and empirical research disclosed limitations of the cost-benefit analysis, used for public projects evaluation and identified the problem field for improving the cost-benefit analysis or creating new methods for public project evaluation.

Suggested Citation

  • Jurgita Baranauskiene & Valdemaras Makutenas & Albina Novosinskiene, 2014. "What Are Left Underestimated Using Cost-Benefit Analysis For Public Project Evaluation?," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 8(1), pages 856-867.
  • Handle: RePEc:isp:journl:v:8:y:2014:i:1:p:856-867
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    References listed on IDEAS

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    1. Paul Collier & Anthony J Venables, 2008. "Managing Resource Revenues: Lessons for low income countries," OxCarre Working Papers 012, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    2. van de Walle, Dominique, 2002. "Choosing Rural Road Investments to Help Reduce Poverty," World Development, Elsevier, vol. 30(4), pages 575-589, April.
    3. W. Michael Hanemann, 1994. "Valuing the Environment through Contingent Valuation," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 19-43, Fall.
    4. Nyborg, Karine, 2000. "Project analysis as input to public debate: Environmental valuation versus physical unit indicators," Ecological Economics, Elsevier, vol. 34(3), pages 393-408, September.
    5. Medaglia, Andres L. & Hueth, Darrell & Mendieta, Juan Carlos & Sefair, Jorge A., 2008. "A multiobjective model for the selection and timing of public enterprise projects," Socio-Economic Planning Sciences, Elsevier, vol. 42(1), pages 31-45, March.
    6. Sugden, Robert & Williams, Alan, 1978. "The Principles of Practical Cost-Benefit Analysis," OUP Catalogue, Oxford University Press, number 9780198770411.
    7. Alfredo M. Pereira, 2000. "Is All Public Capital Created Equal?," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 513-518, August.
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    More about this item

    Keywords

    investment; public project; social benefits; cost-benefit analysis;

    JEL classification:

    • A - General Economics and Teaching

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