Published May 07, 2023
Methods for evaluating private and public projects; decision rules, efficiency conditions, and methods of conducting cost-benefit analysis. Application of the technique. This course assumes prior familiarity with probability, expected values, and variance.
Prereq: ECON 201 or ECON 290; ECON 221 or any prior course in probability and/or basic statistics
Trade-offs are inherent to the economic policy-making process. Scarce public resources devoted to one
program in one policy area inevitably constrain spending in all other policy areas. This course introduces
the method of Cost-Benefit Analysis, which is instrumental in providing policy makers with specialized
tools and information for determining the economic merits of various projects. This is achieved by
carefully taking into account the comprehensive list of appropriately monetized and discounted costs and
benefits to society that are associated with any policy. Relying on basic principles of microeconomics,
the course will develop a sound understanding of the main advantages and limitations of the Cost
Benefit Analysis method, along with a proficiency in both assessing and conducting such analyses in
practice. This is achieved using a combination of theory, discussions, case studies and practical
examples. New topics include updated discussions – based on the latest research – on experimental and
behavioural evidence associated with non-pecuniary effects of employment, the social discount rate in
the context of climate change mitigation and adaptation, cost-effectiveness and cost-utility analysis. An
added emphasis on the practical applicability of each concept will permeate the course content.
| Comprehend the usefulness and limitations of the CBA process |
| Become proficient in employing the main microeconomic building-blocks as used in CBA, such as: willingness to pay and the accept, Pareto efficiency, the role of externalities, discounting, economic surplus, private and social cost and value |
| Understand the basic components of CBA, including: estimation of impacts, monetization, market and non-market valuation methods, estimation and prediction under uncertainty |
| Become an informed consumer, critic, and producer of CBA |
| Title / Name | Notes / Comments | Required |
|---|---|---|
| Boardman, Greenberg, Vining, and Weimer. “Cost-Benefit Analysis: Concepts and Practice”, 5th Edition, Cambridge University Press, 2018. | There is an e-text purchase option for Boardman, available through our UW VitalSource e-store. Students may also find this textbook online, used or for rent at more affordable prices than a new print copy. Previous editions of the text are also usable, however students should note that chapter numbers may differ, and some new content has been added in the latest version. Any reference to a chapter (or page number) in Boardman et al. refers to the 5th edition! | Yes |
Recommended:
For textbook ordering information, please contact the W Store | Course Materials + Supplies.
For your convenience, you can compile a list of required and optional course materials through BookLook using your Quest userID and password. If you are having difficulties ordering online and wish to call the Waterloo Bookstore, their phone number is +1 519-888-4673 or toll-free at +1 866-330-7933. Please be aware that textbook orders CANNOT be taken over the phone.
Course Reserves for Students are used in this course. Course Reserves can be accessed using the Library Resources widget on the Course Home page.
| Component | Value |
|---|---|
| Weekly Exercises | 30% |
| Group Discussions | 20% |
| Midterm assignment | 20% |
| Final Project Assignment | 30% |
Official Grades and Academic Standings are available through Quest.
No assignment screening will be used in this course.
Academic integrity: In order to maintain a culture of academic integrity, members of the University of Waterloo community are expected to promote honesty, trust, fairness, respect and responsibility. [Check the Office of Academic Integrity for more information.]
Grievance: A student who believes that a decision affecting some aspect of their university life has been unfair or unreasonable may have grounds for initiating a grievance. Read Policy 70, Student Petitions and Grievances, Section 4. When in doubt, please be certain to contact the department’s administrative assistant who will provide further assistance.
Discipline: A student is expected to know what constitutes academic integrity to avoid committing an academic offence, and to take responsibility for their actions. [Check the Office of Academic Integrity for more information.] A student who is unsure whether an action constitutes an offence, or who needs help in learning how to avoid offences (e.g., plagiarism, cheating) or about “rules” for group work/collaboration should seek guidance from the course instructor, academic advisor, or the undergraduate associate dean. For information on categories of offences and types of penalties, students should refer to Policy 71, Student Discipline. For typical penalties, check Guidelines for the Assessment of Penalties.
Appeals: A decision made or penalty imposed under Policy 70, Student Petitions and Grievances (other than a petition) or Policy 71, Student Discipline may be appealed if there is a ground. A student who believes they have a ground for an appeal should refer to Policy 72, Student Appeals.
Note for students with disabilities: AccessAbility Services, located in Needles Hall, Room 1401, collaborates with all academic departments to arrange appropriate accommodations for students with disabilities without compromising the academic integrity of the curriculum. If you require academic accommodations to lessen the impact of your disability, please register with AccessAbility Services at the beginning of each academic term.
Turnitin.com: Text matching software (Turnitin®) may be used to screen assignments in this course. Turnitin® is used to verify that all materials and sources in assignments are documented. Students' submissions are stored on a U.S. server, therefore students must be given an alternative (e.g., scaffolded assignment or annotated bibliography), if they are concerned about their privacy and/or security. Students will be given due notice, in the first week of the term and/or at the time assignment details are provided, about arrangements and alternatives for the use of Turnitin in this course.
It is the responsibility of the student to notify the instructor if they, in the first week of term or at the time assignment details are provided, wish to submit alternate assignment.