Cost-Benefit Analysis

Om kursen

Cost-benefit analysis (CBA, kostnads-nyttoanalys) is a method for assessing projects¿profitability for society. It plays an important role as decision-support in most countries, including Sweden. For example, the Swedish Transport Administration (Trafikverket) has a standard procedure for applying CBA for economic (samhällsekonomisk) assessment of transport infrastructure projects such as suggested new roads and railroads. The method has a solid foundation in economic theory (welfare economics, nationalekonomisk välfärdsteori), which implies that its specific points of departure should be considered in the interpretation of the results of the method.  

This course will:

1.     Exemplify CBA through applications carried out as part of PhD theses at Chalmers. Introduce the ethical and theoretical foundations of CBA and its relation to other assessment methods such as cost-effectiveness analysis and sustainability assessment through multi-criteria analysis. Explain how CBA theory can be applied, including specific CBA topics such as discounting and distributional analysis (fördelningsanalys).


2.     Explain and exemplify how environmental change can be included in CBA through economic valuation of goods and services provided by the environment, e.g., ecosystem services and geosystem services.

3.     Let the students carry out projects in which they develop suggestions on how CBA and/or economic valuation can be applied to some real-world environmental issue and write a short paper about the project. The topic for the project is selected in consultation with the course leaders and is preferably linked to the students’ PhD projects.

The course includes 6 lectures and 5 presentations of CBA applications that together cover issues 1-2 above and thus provide a basis for the projects. Most lectures are combined with an opportunity for the students to have discussions with the teacher about their project work. The course is concluded by a full day seminar in which students are presenting the results of their projects and discussing the other students’ project results. (An additional seminar might be added if needed, depending on the number of students taking the course.)

Mer information

Contact the examiner

Kurslitteratur

Textbook

Johansson, P-O., Kriström, B., 2018. Cost-Benefit Analysis. Cambridge Elements. Cambridge University Press. https://doi.org/10.1017/9781108660624 

Articles/reports

Bergion, V., Lindhe, A., Sokolova, E., Rosén, L., 2018. Risk-based cost-benefit analysis for evaluating risk mitigation in a drinking water system. Water Research 132, 111-123. https://doi.org/10.1016/j.watres.2017.12.054 

Drenning, P., Volchko, Y., Ahrens, L., Rosén, L., Söderqvist, T., Norrman, J., 2023. Comparison of PFAS soil remediation alternatives at a civilian airport using cost-benefit analysis. Science of the Total Environment 882, 163664. http://dx.doi.org/10.1016/j.scitotenv.2023.163664 

Merisalu, J., Sundell, J., Rosén, L., 2023. Probabilistic cost-benefit analysis for mitigating hydrogeological risks in underground construction. Tunnelling and Underground Space Technology 131, 104815. https://doi.org/10.1016/j.tust.2022.104815 

Ohlin Saletti, A., Lindhe, A., Söderqvist, T., Rosén, L., 2023. Cost to society from infiltration and inflow to wastewater systems. Water Research 229, 119505. https://doi.org/10.1016/j.watres.2022.119505 

Volchko, Y., Berggren Kleja, D., Back, P.-E., Tiberg, C., Enell, A., Larsson, M., Jones, C. M., Taylor, A., Viketoft, M., Åberg, A., Dahlberg, A.-K., Weiss, J., Wiberg, K., Rosén, L., 2020. Assessing costs and benefits of improved soil quality management in remediation projects: A study of an urban site contaminated with PAH and metals. Science of the Total Environment 707, 135582. https://doi.org/10.1016/j.scitotenv.2019.135582 

Additional papers and reports will be added as literature. 

Föreläsare

Examiner: Lars Rosén, Professor Engineering Geology, Dept of Architecture and Civil Engineering, Chalmers University of Technology Teachers: Tore Söderqvist, Associate Professor of Economics at the Stockholm School of Economics, and researcher at Holmboe & Skarp AB, tore.soderqvist@holmboe-skarp.se. Presenters of CBA applications at Chalmers: Viktor Bergion, Paul Drenning, Johanna Merisalu, Anna Ohlin Saletti and Yevheniya Volchko.