Economics, Latest

385. Restructured Benefit: Cost Analysis course

by David Pannell

I’ve now taught my online “micro-credential” course on Applied Benefit: Cost Analysis four times and it has gone really well – many happy graduates and many organisations enrolling additional staff. For 2023, I’ve broken the course into three shorter courses to make it less onerous for people who are busy with work, family or study.

The original version of the course ran for 12 weeks. It was the size and workload of a full university unit. Many people with busy lives have successfully completed the course but, understandably, some found it difficult to sustain the workload required.

To help with this, I am now offering three new courses that each cover a third of the original unit. If you do all three, you get all of the material from the original course.

You can still enroll in all three units together and complete them in quick succession over 12 weeks of work, giving almost the same experience as the original course. However, you also now have the option of spreading the work over a longer time frame. For example, you could do one of the three courses every six months until they are all done. I’m hoping that this will help more people to be able to take on the courses.

Or, you can now pick and choose among the three courses and just do one or two of them. (If you do the second or third course in the series, you need to have existing knowledge equivalent to the first or second course.)

So if you’ve been thinking about doing the course but worried about whether you could fit it in, now is the time to do it. Enrollments are now open.

The three new courses are:

Applied Benefit: Cost Analysis: The Essentials, Enrol here

Applied Benefit: Cost Analysis: Measuring Benefits, Enrol here

Applied Benefit: Cost Analysis: Practical Issues, Enrol here

The “Enrol here” links also provide further information about each of the courses, but it’s fairly brief, so if you want more details, I’ve provided them below.

If you complete all three courses, they can be used as credit for one full unit when you enroll in a new Masters degree in the School of Agriculture and Environment at UWA.

A brochure describing the three courses is available here.

To discuss the option of a self-paced version of any of the courses, contact the course coordinator, david.pannell@uwa.edu.au

Applied Benefit: Cost Analysis: The Essentials

Enrol here

Assessment: A quiz (50%); Creation of a BCA spreadsheet (50%)

Cost: AU$440 incl. GST

Limited bursaries are available if you are based in a developing country: AU$44 incl. GST. (Email ceep@uwa.edu.au to apply.)

Week

Date

 Topic no Topic Workshop
1 1 Introduction (What is BCA? Example. Main steps in a BCA.) 1. Example BCA in INFFEWS BCA Tool
2 Project definition
2 3 Time and discounting 1 2. Spreadsheet for discounting
4 Time and discounting 2
3 5 Benefits 3. Spreadsheet design principles + BCA spreadsheet
6 Costs
4 7 Criteria for selecting projects 4. BCA spreadsheet
8 Rough BCA. Reporting.

 

Topic no Topic Video no. Video topic
1 Introduction 1.1 Welcome to the course
1.2 BCA Basics
1.3 Example BCA
1.4 Main steps in a BCA
1.5 Readings and key points
2 Project definition 2.1 Talking with the stakeholders
2.2 Actions and outcomes
2.3 Mechanisms to influence others
2.4 With-project and without-project scenarios
2.5 With-project and without-project checklist
2.6 Readings and key points
3 Time and discounting 1 3.1 Benefits and costs over time
3.2 Time lags – examples
3.3 Compounding interest rates
3.4  Final value example
3.5 Discounting
3.6 Rationales for discounting
3.7 Readings and key points
4 Time and discounting 2 4.1 Real versus nominal
4.2 Real versus nominal – numerical examples
4.3 Discounting controversies
4.4 Choosing discount rates – What to do
4.5 Other time-related issues
4.6 Readings and key points
5 Benefits 5.1 Introduction to benefits
5.2 Market benefits
5.3 Prices varying or constant
5.4 Non-market benefits
5.5 Risk reduction
5.6 Reduction or delay in costs
5.7 Readings and key points
6 Costs 6.1 Project costs
6.2 In-kind costs
6.3 Ongoing costs
6.4 Costs to others
6.5 Readings and key points
7 Criteria for selecting projects 7.1 NPV and BCR
7.2 IRR and MIRR
7.3 Which criterion to use
7.4 When no single criterion is suitable
7.5 Multiple constraints on costs
7.6 Who benefits? Who pays?
7.7 Readings and key points
8 Rough BCA. Reporting 8.1 Rough BCA
8.2 Explaining results to non-economists
8.3 Report aim and structure
8.4 Comparisons
8.5 Example tables and graphs
8.6 Readings and key points
8.7 What next?

 

Applied Benefit: Cost Analysis: Measuring Benefits

Enrol here

Assessment: A quiz (50%); Creation of a BCA spreadsheet containing many different benefit types (50%)

Cost: AU$440 incl. GST

Limited bursaries are available if you are based in a developing country: AU$44 incl. GST (Email ceep@uwa.edu.au to apply.)

Week

Date

 Topic no Topic Workshop
1 1 Benefits (different types and ways of calculating) 1. BCA spreadsheet – the timing of benefits
2 Market values – Benefits to consumers
2 3 Market values – Benefits to producers 2. BCA spreadsheet – benefits per person, per year, per asset.
4 Market values – Market equilibrium
3 5 Non-market benefits – stated preference 3. BCA spreadsheet – complex benefit types
6 Non-market benefits – revealed preference
4 7 Benefit transfer (Three different approaches) 4. Examples of benefit transfer
8 Measuring benefits – other issues

 

Topic no Topic Video no. Video topic
1 Benefits (different types and ways of calculating) 1.1 Welcome to the course
1.2 Introduction to benefits
1.3 Per unit
1.4 Per year in aggregate
1.5 Change in asset value
1.6 Risk reduction
1.7 Reduction or delay in costs
1.8 Readings and key points
2 Market values 1 – Benefits to consumers 2.1 Market goods and market benefits
2.2 Marginal benefits
2.3 Total benefits and total net benefits
2.4 Consumer surplus
2.5 Price elasticity of demand
2.6 Examples of demand curves
2.7 Readings and key points
3 Market values 2 – Benefits to producers 3.1 Marginal costs
3.2 Producer surplus
3.3 Producer surplus is an approximation
3.4 Price elasticity of supply
3.5 Example supply curves
3.6 Marginal cost of environmental projects
3.7 Readings and key points
4 Market values 3 – market equilibrium 4.1 Total surplus
4.2 Subsidies
4.3 A tax
4.4 Obtaining demand and supply curves
4.5 When are market models needed for BCA?
4.6 Readings and key points
5 Non-market benefits – stated preference 5.1 Introduction to non-market values
5.2 Non-market values: theory and measurement
5.3 Contingent valuation
5.4 Choice experiments
5.5 Readings and key points
6 Non-market benefits – revealed preference 6.1 Hedonic pricing
6.2 Travel cost method
6.3 Disentangling benefit types
6.4 Criticisms of NMV
6.5 Interview with Michael Burton, NMV expert
6.6 Readings and key points
7 Benefit transfer) 7.1 Introduction to benefit transfer
7.2 Unit value transfer
7.3 Benefit function transfer
7.4 When is benefit transfer acceptable
7.5 Interview with Abbie Rogers, benefit transfer expert
7.6 Readings and key points
8 Measuring benefits – Other issues 8.1 Life satisfaction
8.2 Cost of avoidance or repair
8.3 When to stop adding benefits
8.4 Deliberative processes
8.5 NMV strengths and weaknesses
8.6 Readings and key points
8.7 What next?

 

Applied Benefit: Cost Analysis: Practical Issues

Enrol here

Assessment: A quiz (50%); Debugging a BCA spreadsheet, adding important complexities, completing a useful sensitivity analysis (50%)

Cost: AU$440 incl. GST (but if you enrol in the other two courses as well, the cost of this unit is only AU$210 incl GST).

Limited bursaries are available if you are based in a developing country: AU$44 incl. GST (Email ceep@uwa.edu.au to apply.)

Week

Date

 Topic no Topic Workshop
1 1 Obtaining information for BCA 1. Debugging spreadsheet + Protecting spreadsheet
2 Other BCA issues (Whose benefits count? Who benefits? Who pays? Negative impacts.)
2 3 Representing behaviour 2. Including project risk, behaviour, excess burden, many stakeholders
4 Project risks
3 5 Handling uncertainty in BCA 3. Sensitivity analysis
6 Sensitivity analysis
4 7 Traps and errors to avoid 4. Programming Excel using VBA
8 Practical issues recap

 

Topic no Topic Video no. Video topic
1 Obtaining information 1.1 Welcome to the course
1.2 Engaging with the client
1.3 Potential sources of information
1.4 Eliciting numbers from experts
1.5 Interview with Ans Vercammen, expert in expert elicitation
1.6 Readings and key points
2 Other issues 2.1 Negative impacts of project
2.2 Excess burden of taxation
2.3 Who benefits? Who pays?
2.4 Whose benefits and costs count?
2.5 Interview with Martin Van Bueren, economics consultant
2.6 Readings and key points
3 Behaviour 3.1 Behaviour, compliance, adoption
3.2 Evidence about behaviour change
3.3 Representing behaviour in BCA
3.4 Interview with Rick Llewellyn, behaviour expert
3.5 Readings and key points
4 Project risks 4.1 Different aspects of risk in BCA
4.2 Types of project risks
4.3 Project risk as a distribution
4.4 Project risk as a probability
4.5 Risk in the base case
4.6 Readings and key points
5 Handling uncertainty in BCA 5.1 What is uncertainty? What is uncertain?
5.2 Reporting uncertainty
5.3 Independent review
5.4 Adaptive management and research
5.5 Readings and key points
6 Sensitivity analysis 6.1 Purposes of sensitivity analysis
6.2 Single-variable sensitivity analysis
6.3 Multiple-variable sensitivity analysis
6.4 Monte Carlo analysis
6.5 Readings and key points
7 Traps and errors to avoid 7.1 Double counting
7.2 Jobs
7.3 Other traps and pitfalls to avoid
7.4 Over-optimism
7.5 Readings and key points
8 Practical issues recap 8.1 Challenges in doing BCA
8.2 Pitfalls and errors to avoid
8.3 Checklist for quality assurance
8.4 Reporting
8.5 Interview Dr Liz Petersen, experienced BCA user
8.6 What next?