Social Cost-Benefit Analysis (SCBA)
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Questions and Answers

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?

  • 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)?

  • 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?

    <p>Because governments play a key role in economic development.</p> Signup and view all the answers

    What distinguishes SCBA from traditional Cost-Benefit Analysis (CBA)?

    <p>CBA maximizes net income, while SCBA maximizes net social benefit.</p> Signup and view all the answers

    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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    Description

    Learn about Social Cost-Benefit Analysis (CBA) and how it aids decision-making by assessing the costs and benefits of projects from a societal viewpoint. Understand the rationale for SCBA and its application in evaluating infrastructural and sustainable energy development projects.

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