01 March, 2019
Cost-benefit Anlaysis
Cost-benefit analysis (CBA) is used for appraising the net economic impact of a project proposal (e.g. barramundi farm) based on a comparison of the economic benefits and costs. CBA is akin to a financial analysis, except the focus is on all costs and benefits for society as a whole rather than an individual company. This includes all benefits and costs, whether they are private (relating to the proponent), social or environmental.
The purpose of economic impact assessments is to estimate the total economic impact of a piece of infrastructure or project on the level of economic activity (e.g. employment, value added, regional output, taxes) in a region. It differs from CBA in that it is not assessing whether society is improved from the project proposal but rather measures the increase in total economic activity expected from the project proposal, comprising direct (impacts generated by activities directly from the project), indirect (impacts generated by activities downstream and upstream of the project) and induced impacts (additional consumption enabled by wages from direct/indirect activities), as shown below.
01 March, 2019