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TO Social Cost Benefit Analysis

The document discusses social cost-benefit analysis (SCBA) for evaluating projects. SCBA considers all social impacts, both positive (social benefits) and negative (social costs), from the perspective of society as a whole. It aims to only proceed with projects where social benefits exceed or equal social costs. SCBA is important for both public and private investments that require government approval. It helps account for market imperfections, externalities, taxes/subsidies, concerns around savings, redistribution, and determining merit wants.

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Satisthkavita Nanhu
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69 views11 pages

TO Social Cost Benefit Analysis

The document discusses social cost-benefit analysis (SCBA) for evaluating projects. SCBA considers all social impacts, both positive (social benefits) and negative (social costs), from the perspective of society as a whole. It aims to only proceed with projects where social benefits exceed or equal social costs. SCBA is important for both public and private investments that require government approval. It helps account for market imperfections, externalities, taxes/subsidies, concerns around savings, redistribution, and determining merit wants.

Uploaded by

Satisthkavita Nanhu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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INTRODUCTION

TO
SOCIAL COST BENEFIT ANALYSIS
PROJECT MANAGEMENT
• Project management deals with planning,
scheduling, controlling and monitoring the
complex non-routine activities that must be
completed to reach the predetermined
objectives of the project.
Case Study

Study the following situation and list out the costs and benefits associated with
this project.

• Let us suppose that the Government is considering to construct a


bridge in a very congested area.
• If people use this bridge then the traffic will be reduced by a good
amount in that area .
• People in that area will receive benefits other than reduction in
traffic like- well connected transport network, link to the main
city, development of transport system will lead to the growth of
industries.
• This will bring employment for the people residing in the
surrounding areas.
• The construction of the bridge will require a large amount of
investment, maintenance cost. Toll taxes can be applied to recover
the expenses related to maintenance of the bridge.
• The costs associated with this project is huge.
Analysis of Projects

Analysis

Commercial Social Cost


Cost Benefit Benefit
Analysis Analysis
Social Cost Benefit Analysis
(SCBA)
• To reflect the real value of the project to the society, one has to
consider the impact of the project on the society.
• So when we evaluate the project from the view point of the
society or the economy as a whole , it is known as Social Cost
Benefit Analysis.
• Social cost-benefit analysis is a systematic and cohesive method
to survey all the impacts caused by an urban development
project.
• It comprises not just the financial effects (investment costs,
direct benefits like tax and fees, et cetera), but all the social
effects, like: pollution, safety, indirect (labour) market, legal
aspects, et cetera.
Positive Impact
(Social Benefit)
Impact
Negative
Impact (Social
Cost)
Social Benefits & Social Costs
• Social Cost is the cost to society as a whole
from an action, project or policy change.

• Social benefit means the improvements


attained in the living conditions of its
beneficiaries that are directly attributable to
the project.
Essence of SCBA
• Let Social Cost = C
• Social Benefit = B
• To evaluate the costs and benefits of the
project and to proceed with it if and only if
benefits match or exceed the cots.
• B> C or at least B=C.
Objectives of SCBA
• Contribution of project towards the fulfillment of
certain social objectives which in turn is beneficial for
the society like- employment, self sufficiency etc.
• A great impact is created on the level of savings and
investments in the society.
• Provides economic benefits.
• Creates an impact of the project on the income
distribution in the society.
Scope of SCBA
Public Investment-SCBA is
important socially for the
developing countries where Govt.
plays a significant role in economic
development.

Private Investment-SCBA is also


important in case of Private
Investment since they are to be
approved by various Govt. & semi-
Govt. agencies.
Significances of SCBA
Market imperfections

Externalities

Taxes and subsidies

Concern for saving

Concern for redistribution

Merit wants

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