This video is based on my journal article ‘Proposed Changes to the Cost Benefit Analysis Decision Criteria for Road Projects’ that I published in the Pennsylvania State University ‘Transportation Journal’ in 2012. A number of different economic indicators and measures used in cost benefit analysis are described in this paper. The paper aims to determine which combinations of these indicators and measures are most useful to decision makers. Below is the abstract of the paper.
Paper Abstract
The Australian Transport Council (ATC) have identified that the benefit cost ratio (BCR), the net present value (NPV) and first year rate of return (FYRR) decision criteria are appropriate inputs to project prioritization, mutual exclusive project selection and optimal timing respectively. This paper suggests the net benefit investment ratio (NBIR), the incremental net benefit investment ratio (INBIR) and the internal rate of return (IRR) subject to decision criteria incorporating the marginal project as alternatives to those proposed by the ATC. The proposed decision criteria aim to reduce the impact of uncertainty surrounding discount rates and opportunity costs of capital, hence improving the quality of the quantitative inputs provided to decision makers.
The video can be watched at the link below:
The reference for the full paper can be accessed is:
Davies, W. (2012), Proposed Modifications to the Cost Benefit Analysis Decision Criteria for Road Project Evaluation to Improve Decision-making (Industry Note), Transportation Journal, 51, (4), 473-486, available at: http://muse.jhu.edu/journals/transportation_journal/summary/v051/51.4.davies.html
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