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Cost Benefit/Effective Analysis

Cost-Benefit/Effective Analysis
RUTGERS UNIVERSITY, THE STATE UNIVERSITY OF NEW JERSEY
Department of Economics
(50, Subject 220, Course 318, Section 01, ST: 3 credits)

Professor Tetsuji Yamada, Ph.D.
Classroom: Armitage Hall (ATG-218), 1:30pm-2:50pm (Tuesday & Thursday)
Office Hours: ATG-330: Tuesday and Thursday (11:30AM-1:20PM & 4:30-5:00PM) or by Appointment
Office: ATG-330, Tel: 856-225-6025
E-mail: tyamada@crab.rutgers.edu
Econ website of Yamada: http://economics.camden.rutgers.edu/faculty/tetsuji-yamada/
Econ Department website: http://economics.camden.rutgers.edu/
Department Office:ATG-440, 4th floor, Department of Economics, Tel: 856-225-6136

Textbook:
Boardman, Greenberg, Vining and Weimer
Cost-Benefit Analysis: Concepts and Practice, Forth/Fifth Edition, Person/Prentice Hall

General Course Objectives:
 The intention of this course is for students to understand cost-benefit analyses and the process of decision making through the use of economic tools and techniques through which society’s resources are efficiently allocated. The course reviews the issues and methods of assessing healthcare technologies, public health, public policy, public-sector management, public administration, urban planning and environmental issues. Cost-benefit analysis is useful to public policy and economic/business decision-makers. It emphasizes the methods used to perform economic evaluations, such as cost-effectiveness and cost-benefit analyses; to assess efficacy, effectiveness, and the safety of healthcare technologies; to assess the effectiveness of research and the applications to public policy. The course covers valuing benefits and costs in primary and secondary markets, discounting benefits and costs in future time periods, expected values and sensitivity analysis under uncertainty, option price and option value, social discount rates, and cost-effective analysis.

Goal #1:

The development of critical thinking skills:
The student will learn the scientific method in considering economic problems and issues. In general, students will be able to analyze that part of the socio-economic system to which cost-benefit analyses apply, using critical thinking. The student will be able to organize and evaluate evidence derived from economic analysis, and answer questions about public policy, economics, and business decision-making.

Goal #2:
The accumulation of factual knowledge:
Students taking cost/benefit analysis will demonstrate knowledge and understanding of all important concepts by applying economic tools and techniques to public policy, economic and business decision-making. Students, using analytical skills developed in this class, will understand the implications of public policy issues and their aspects. They will learn that public policy, economic and business decision-making often pose dilemmas for the public to solve. In short, students will have acquired factual knowledge about the processes and analyses of decision making for the society, including the conceptual foundations of the economic knowledge necessary for critical interpretation of those processes.

Goal #3:
Application of critical thinking to factual knowledge, and development of reflective decision making skills:
Students will use logical and critical thinking to chain together assumptions, a given factual situation and a conclusion from that situation. Students will acquire a basis for reflective decision-making skills. The objective of this course is for the student to learn about cost/benefit analysis. In addition, students learn how to analyze economic problems, how to synthesize economic concepts, how to think critically, and how to determine cause and effect. The goal of the course is for students to understand the scientific method in considering public policy and economic/business decision-making problems and issues, how the scientific method evolved in cost/benefit analysis and how to use scientific methods in cost/benefit analyses.

Subjects:

  TopicsChapters
1. Introduction and concept 1-3
2. Valuing benefits and costs 4-5
3. Discounting benefits and costs 6
4. Expected value and sensitivity analysis 7
5. Option price and option value for public policy 8
6. Existence value and social discount rate for decision making 9-10
7. Cost-effective analysis 17
8. Weighted cost-benefit analysis and evaluation 18-19
9. Shadow prices and C/B >15-16
10. Valuing impacts (evaluation and estimation) of policy/program 11-13
11. Contingent valuation: Using surveys to elicit information about C/B 14
 
September 4-Lecture 1  
 
1st mid-term examination 20% (October 6th)
2nd mid-term examination 20% (November 8th)
Final Examination 30% (December 15th – 22nd)
Quizzes and homework 20%
Individual project:
Research paper
10% (Due by December  9th)
Total Grade Point 100%

Course Requirements:

1. Testing:

Ten examinations will be given; including quizzes and homework assignments. The examinations will be announced approximately one week in advance. There will be regular/pop-up quizzes during the semester. You will be assigned homework occasionally. Make-ups will not be given unless the instructor is consulted in advance and permission is given or unless extraordinary circumstances arise (as judged by the instructor) which prevent advance contact. Questions should be answered thoughtfully. These questions are formed by the information discussed in class discussions, and both required and supplemental readings. More specific instructions will be attached to the exam when it is handed out.

2. Timely Completions of All Assignments:
There will be regular/pop-up quizzes during the semester. You will be assigned homework occasionally. Do not skip the classes in order not to miss the quizzes and homework because there is no makeup quizzes and homework. Timely completion of all assignments. Timely completion of the assignments is a formal requirement of the course. The assignments are intended to help students reinforce concepts and applications developed in class. Students are strongly encouraged to put forth maximum effort on each homework assignment and quiz. I accept your assignments by hand. Don’t submit your assignments by e-mail.

3. Attendances and Participation:
Class attendance is crucial to this course. Class will begin promptly. Participation is also crucial to this course. Students are expected to actively participate in each class by contributing thoughts, ideas, and information based on assigned readings and personal resources. Discussion in class is encouraged at all times. I expect you to attend class regularly. It has been my experience that students who miss classes generally have greater difficulty in learning the material. Class participation is directly factored into the final grade and it will also be considered in borderline cases.

It has been my experiences that students who miss classes generally have great difficulty learning the material. Class participation is factored into the final grade and it will also be considered in borderline cases. Truancy automatically becomes “f”.

4. Notes to Students:
To obtain the maximum benefit from the course you should do the assigned readings prior to class and attend the lectures. Specific questions and dates for quizzes and homework will be given in conjunction with the topics. Academic honesty shall be maintained in accordance with University policy. You must turn off your cell phone during the class lecture and class examinations.

5. Criteria for Evaluation:
After the end of the semester, students will receive a final grade report. This will include a breakdown of the points he/she earned for his/her two mid-term examinations, an individual project, a group project, one final examination, all assignments, and a point total with the corresponding letter grade.

6. Grading:
Undergraduate students:
30% = Final examination; 20%x2 = Two mid-term examinations;
Quizzes & homework = 20%; and One research paper = 10%.

Grading: Graduate students:
30% = Final examination; 20%x2 = Two mid-term examinations;
Quizzes & homework = 10%; and One research paper = 20%.

Borderline Case:
Homework assignments and quizzes are factored into the final grade and it will also be considered in borderline cases.

Grade Scale:
A = 93~100%             B+ = 88~92%             B = 82-87%
C+ = 78~81%;           C = 70~77%                D = 60~69                   F <60%

7. Plagiarism:
Plagiarism takes many forms. Flagrant forms include purchasing or copying a paper from the internet or from a fellow student or anyone else, whether or not that paper is published; copying or cutting and pasting portions of others’ work (whether a phrase, sentence, paragraph, chart, picture, figure, method or approach, experimental results, statistics) without attribution. A more subtle, but equally heinous, form is paraphrasing or attempting to put in your own words the theories, opinions or ideas of another without proper citation. Carelessly, inadequately or inaccurately using citations are also a form of plagiarism. Fabricating citations is a very serious form. Re-using your own previous work without appropriate citation is plagiarism. Even inappropriately assuming that a fact or idea is common knowledge and, therefore, not providing a citation is plagiarism.

8. Cheating:
Examples of cheating include, but are not limited to: giving or receiving unauthorized assistance to/from another on quizzes, examinations, assignments; using materials or devices (such as calculators, computers, cell phones) not specifically authorized during any form of a test or examination; sitting in for someone else or permitting someone to sit in for you on any form of test or examination; working on any form of test or examination beyond the allotted time; hiding, stealing or destroying materials needed by other students; and altering and resubmitting for re-grading any assignment, test or examination.

Outcomes:
An act of academic misconduct will have consequences. Depending on the specific nature and circumstances of one’s behavior, a student who is found to have violated academic integrity may be subject to one or more of the following:

  • Performing additional work(s) intended to assist the student in avoiding future misconduct.
  • Redoing the work, up to and including repeating the entire class.
  • Reduction in grade on a particular submitted piece of work, or segment of work required for a course or the entire course down to and including a failing grade.
  • Within five business days of notification, the instructor will inform the student dean and the department chairperson, and, if necessary, review the procedures to be followed and any prior history of violations by the accused student.