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Questions and Answers
What is the main purpose of Social Cost-Benefit Analysis (SCBA)?
What is the main purpose of Social Cost-Benefit Analysis (SCBA)?
- To evaluate costs and benefits of projects only.
- To support decision-making at all levels of government. (correct)
- To determine economic benefits of private investments.
- To maximize net social benefit of projects.
In what areas can Social Cost-Benefit Analysis (SCBA) be applied?
In what areas can Social Cost-Benefit Analysis (SCBA) be applied?
- Primarily to evaluate individual economic benefits.
- Only public investments.
- Exclusively to private investments.
- To infrastructural projects, area development, sustainable energy, and water issues. (correct)
What is the primary focus of Social Cost-Benefit Analysis (SCBA)?
What is the primary focus of Social Cost-Benefit Analysis (SCBA)?
- Determining the economic benefits in currency terms.
- Evaluating public investments exclusively.
- Maximizing profits for private investors.
- Determining economic benefits in terms of shadow prices and societal impacts. (correct)
Why is Social Cost-Benefit Analysis (SCBA) important for developing countries?
Why is Social Cost-Benefit Analysis (SCBA) important for developing countries?
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What distinguishes SCBA from traditional Cost-Benefit Analysis (CBA)?
What distinguishes SCBA from traditional Cost-Benefit Analysis (CBA)?
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Study Notes
Social Cost-Benefit Analysis (SCBA)
- SCBA is a vital tool for decision-making, providing a systematic framework to evaluate the costs and benefits of projects, policies, or interventions from a societal perspective.
Rationale for SCBA
- SCBA supports decision-making for national, provincial, and municipal governments.
- It is used for infrastructural projects, area development projects, sustainable energy development, and water and nature issues.
Scope of SCBA
- SCBA can be applied to both public and private investments.
- In public investments, SCBA is crucial, especially for developing countries where the government plays a significant role in economic development.
- In private investments, SCBA is important as private investments require approval from governmental and quasi-governmental agencies.
Objectives of SCBA
- The main focus of SCBA is to determine: • Economic benefits of the project in terms of shadow prices. • The impact of the project on the level of saving and investment in society. • The impact of the project on the distribution of income in society. • The contribution of the project towards fulfilling certain merit wants (self-sufficiency, employment, etc.).
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