The estimation of benefits is what separates CBA and CEA and the analysis presented here requires explicitly noting all of the benefits to be included in the analysis as well as the monetary values of those benefits. All relevant project benefits should be noted. Since a societal perspective is taken in CBA for Bank funded projects, the benefits should include all societal benefits.
The critical factors are four:
Whether a market exists or does not for the goods and services to be provided by the project. If there is a market, price can be elicited directly from published sources or from direct observation. If not, price information will have to be derived from either revealed or stated preferences.
The nature of the Theory of Change. The logic of the intervention and the identified pathways through which the proposed intervention brings the expected impact are central in identifying the mechanisms by which those impacts can be monetized. A credible transition from outputs to outcomes and impacts will hinge on the quality of the assumptions embedded in the Theory of Change and this sequence and logic needs to be consistent with the step required to monetize impacts.
The quality, availability and timeliness (how recent it is?) of the information/data required for benefit estimation.
Sector specific considerations and standard professional practice.
Irrespective of the method, benefit estimation should be clearly linked to the logic chain: input→ output→ outcome→ impact (benefits) chain
· Cost-Benefit Analysis for Development: A Practical Guide (Asian Development Bank, 2013)
· Cost-Benefit Analysis in World Bank Projects (World Bank, 2010)
· Guide to Cost-Benefit Analysis of Investment Projects (European Commission, 2008)
· Cost Benefit Analysis in the Context of the Energy Infrastructure Package (Nils-Henrik von der Fehr - THINK-European Union, 2012)
· Cost-Effectiveness Analysis of education and Health Interventions in Developing Countries (McEwan, Patrick, J. -IADB, 2011)
· Can Cost-Benefit Analysis Guide Education policy in Developing Countries? (Jimenez, Emmanuel; Patrinos, Harry Anthony - World Bank, 2008)
· A Review of the Valuation Of Environmental Costs and Benefits in World Bank (Patricia Silva, Stefano Pagiola- World Bank, 2005)
· Cost-benefit Analysis of Natural Disaster Risk Management in Developing Countries (International Finance Corporation, Manual 2005)
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