This course presents the basic theories and techniques of private investment analysis and public cost benefit analysis. The main focus is to apply CBA in governmental regulations and public works projects. CBA offers a number of advantages in policy analysis. It can help understand the net social benefit and the distributional impacts on stakeholders of a project. It is a conceptually consistent framework for evaluating the trade-offs associated with resource deployments.

However, CBA has some disadvantages. Doing CBA requires a lot of assumptions and information. It takes time and efforts. It costs money. If the results of CBA cannot be used in improving decision making process, it is a waste. There are some barriers in making CBA useful. For example, some projects are too big for CBA to handle. Some benefits or costs cannot be quantified or monetized. Politics may affect the usefulness of CBA. In sum, CBA would be most useful for small projects with clear benefits and costs which can quantified with reasonable costs. The projects should be politically acceptable without big conflicts. The course has six parts:

Unit 1: Investment analysis
Unit 2: Basic CBA
Unit 3: Basic microeconomics
Unit 4: CBA for regulations
Unit 5: CBA for public works projects
Unit 6: Valuation of benefits and costs