Economics, Latest, Policy

344. Applied Benefit: Cost Analysis course

Starting on 22 February 2021, I’m offering a new online course in Applied Benefit: Cost Analysis. It’s a bargain-priced, full-semester university course. 

Since 2008, Benefit: Cost Analysis (BCA) has become a bigger and bigger part of my working life. As I became more engaged with policy and worked closely with various government agencies, I increasingly appreciated how powerful and useful BCA can be. It provides a way of thinking about and assessing policy options and projects that is greatly needed.

  • It helps people to focus on the outcomes that really matter to people, rather than allowing thinking to get trapped at the level of actions and activities.
  • It provides a great way to integrate information of various types (biological, technical, behavioural, financial, social, etc.) in a unified analysis.
  • It provides much-needed discipline when assessing what the benefits and costs of a project really are.

I’ve used BCA principles in various tools I’ve developed, and in numerous training courses I’ve given around the world, including in Australia, New Zealand, Canada, China, Vietnam, Thailand and Mauritius.

In the past few years, I’ve worked intensively with organisations in the water sector in Australia, providing lots of BCA training and developing a BCA tool that I’m really proud of. By now, I’ve done, or supervised, or reviewed, hundreds of BCAs of real projects.

Now all that experience comes together in my new course on Applied BCA. It’s a 12-week, hands-on course, so you’ll come away with all the skills and knowledge you need to undertake high-quality BCAs of real projects.

It’s a stand-alone “micro-credential” course. That means you have a lot of flexibility in how you approach the unit. You can use it as a discrete professional development course. You can do it as a way of testing out whether you want to do further study in a masters degree at UWA. Or you can do it with the intention that it will be your first unit in a masters degree. It is a great way of starting a masters, as it is quite a bit cheaper than a normal unit (even though it’s at the same level and the same size as a normal masters unit). It is available to international students, so there is no need to delay your study plans due to COVID-19 travel restrictions.

Also important in creating this course have been my skills in developing high-quality training videos. My interest in this started when I created my very successful MOOC on Agriculture, Economics and Nature, which has now had over 40,000 people enrol (see feedback on the course here). Since then, I’ve really up-skilled on the creation of videos (including taking advice from my father, who used to be a TV producer). The videos I’ve done for this course are the best I’ve ever done. These are not typical, boring recorded university lectures. To give you an idea of the look and feel, the video below shows snippets from different parts of the course.

If you are not hooked yet, here are some other features.

  • Interviews with experienced experts are included throughout the course.
  • The course is fully online, to make it as accessible as possible to people around the world, or to people who are working.
  • There is a weekly practical session, during which you will learn about creating high-quality spreadsheets in general, and a BCA spreadsheet in particular. You can attend this session live, and ask me all your questions, or you can watch it as a recorded video.
  • The unit is relevant to almost any area of policy, but the examples provided are predominantly from agriculture and the environment.
  • An outline of the course contents is provided below. There is a big emphasis on practical aspects, such as collecting the required data, dealing with uncertainty, and writing effective reports for decision makers.
  • The course starts on February 22, 2021.
  • The price is AU$550.

If you are interested, you can enrol here.

On the above web page, you’ll see that this is just one of five new micro-credential units we are offering, with the others covering:

  • Data Analysis with R for Agriculture and Environmental Science
  • GIS and Remote Sensing in a Changing World
  • Performance Measurement with Data Envelopment Analysis
  • Responsible Agricultural Production

Applied Benefit: Cost Analysis Course Outline

Topics

  1. Introduction (What is BCA? Examples. Main steps in a BCA.)
  2. Project definition (The with-versus-without principle)
  3. Time and discounting (Time lags. Compounding interest rates. Discounting)
  4. Discounting complexities (Real versus nominal. Choosing discount rates)
  5. Long-term discounting (Hyperbolic discounting, Weitzman discounting, controversies)
  6. Benefits (per unit, per year in aggregate, change in asset value, change in risk, cost reduction, cost delay)
  7. Market values 1 – Benefits to consumers. Demand, consumer surplus.
  8. Market values 2 – Benefits to producers. Supply, producer surplus, relationship between producer surplus and profit
  9. Market values 3 – Market equilibrium. Total surplus, effects of policies or projects on total surplus, shifting demand or supply, quotas, subsidies, etc. Estimating supply and demand in practice. What do you need a market model?
  10. Non-market benefits – stated preference
  11. Non-market benefits – revealed preference
  12. Benefit transfer
  13. Measuring benefits – alternatives
  14. Traps when estimating benefits (double counting, measuring the benefits of job creation, over-optimism)
  15. Behaviour, compliance, adoption
  16. Project risks
  17. Costs (Project costs, maintenance costs, private costs)
  18. Criteria for selecting projects
  19. Other issues
  20. Handling uncertainty in BCA
  21. Sensitivity analysis
  22. Preparing an effective BCA report
  23. Obtaining information for BCA.
  24. Practical issues (Challenges in BCA, pitfalls and errors to avoid, checklist for quality assurance)

Workshops

  1. Meet lecturer and other students
  2. Introduction to spreadsheets
  3. Creating spreadsheet for discounting
  4. Creating spreadsheet for Weitzman discounting
  5. Spreadsheet design principles and techniques
  6. Creating a BCA spreadsheet – benefits 1
  7. Creating a BCA spreadsheet – benefits 2
  8. Adding costs, behaviour and project risks to BCA spreadsheet
  9. Calculating NPV and BCR. Testing and debugging your spreadsheet
  10. Automating your spreadsheet with macros.
  11. Sensitivity analysis
  12. Demonstration of INFFEWS BCA Tool

For more on my course, see the promo video below.