Cost-Benefit Analysis
Prepare a cost benefit analysis (CBA) on a (past, current or future) policy initiative of your choice.
Your CBA should include the following components:
- Choose a policy issue (in Cambodia or in New Zealand): Briefly outline the circumstances and nature of the issue, and outline two policy alternatives that can be considered to address the issue.
- For one of these policy alternatives, provide a description of the types of costs and quantification of the costs over the relevant time period relating to the initiative – it is fine for these costs to be very rough (ball-park) figures. Make sure that you discount any future costs (use an annual discount rate of 5%, or choose another rate provided that you justify it).
- For the same policy alternative, provide a quantification of the estimated benefits over the relevant time period relating to the initiative – it is fine for these benefit estimates to be very rough (ball-park) figures. Make sure that you discount any future benefits (use an annual discount rate of 5%, or choose another rate provided that you justify it).
- Determine the estimated benefit: cost ratio (BCR) of this policy alternative
Note: for tasks (ii) and (iii), you need provide tables for both costs and benefits.
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