Office Hours: Tuesday and Thursday 10:30-12:30, or by appointment
ex: 6228, home phone: 503-508-4229, fthompso@willamette.edu
The subject of this course is public cost-benefit analysis. It has three objectives:
This course reflects the view that, in the presence of a capital market where funds can be obtained at a price, the welfare of the citizenry will be maximized by the implementation of all projects offering positive net-present values. Unlike private sector cost-benefit analysis, however, government represents all the groups in a community, so the gains and losses of all these groups should be considered, not just those that accrue to stockholders. Moreover, government has an obligation to look at true social costs and benefits, not just market prices. Further, government decision makers might want to weigh benefits and costs differently if governmental activities or projects alter the distribution of income, the level of unemployment, or some other goal of policy.
Text: BGVH Tony Boardman, David Greenberg, Aidan Vining, and Dave Weimer, Cost-Benefit Analysis: Concepts and Practice [2006 third edition] Upper Saddle River NJ: Pearson Prentice-Hall.
Grading: Project presentations will be evaluated in terms of clarity and effectiveness, plus accuracy. Class participation will be evaluated in terms of your demonstrated understanding of the issues and relevant capital budgeting concepts (cite text!), your ability to present a point of view and skill in persuading your peers to accept that perspective, and your ability to listen and react appropriately and productively to your classmates' contributions. Weights: Downtown Parking Garage: 25 percent; Homework 35 percent; Project: 20 percent; Class participation 20 percent.
Homework assignment should be submitted via ClassTools as eXcel
documents. Open GSM-603: Hand Ins; upload assignment using the
abbreviated title of the assignment and no spaces in the document
title. For example, if you were turning in Downtown Parking Garage,
you would upload it as DPG.doc. to the appropriate
folder. ClassTools will automatically identify the sender and log the
date and time of submission.
Key Links:
Cost Benefit News
January 17 Introduction: allocative inefficiency: public goods, externalities, natural monopoly
January 22 Read BGVW chapter 1
January
24 Read BGVW chapter
2
January 29 Read BGVW chapter 3 (complete
exercises on handout 2, see
answers).
January 31 (complete exercises on class handout 2)
February 5 Read BGVW chapter 4
February 7 Read BGVW chapter 5
February 12 Read Handout
February 14 Read BGVW chapter 6 (complete exercises on class handout 3) Happy Valentines's Day
February 19 Read BGVW chapter 10 Happy Presidents' Day -- Have a nice Mardi Gras
February 21 Read BGVW chapter 7
February 26 (complete exercises on class handout 4, see answers).
February 28 Read BGVW chapter 8
March 5 Read BGVW chapter 9
March 7. CLASS LAB
March 12. Work on Downtown Parking Garage
March 14 Read BGVW chapter 11. Downtown Parking Garage present draft.
March 19. Read BGVW chapter 12
March 21 Read BGVW chapter 13 SELECT TOPIC for TERM-PROJECT Downtown Parking Garage (due)
March 26 SPRING BREAK
March 27 SPRING BREAK
April 2 No class scheduled -- work on group project
April 4 No class scheduled -- work on group project
April 9. Read BGVW chapter 14
April 11 Read BGVW chapter 15 (complete exercises on class handout 5)
April 16 Plug Values
April 18 Read BGVW chapter 18 (complete exercises on class handout 6)
April 23 Read BGVW chapter 17
April 25 Read BGVW chapter 19
April 30 & May 1 Project Presentations
Applications1. Operating investments (modernizing plant and equipment, substituting one program for another, make vs. buy analysis)
2. Physical investment and the environment
3. Human investment (education or health)
4. Intergovernmental grants
5. Tax expenditures
6. Social regulation
Any student eligible for and desiring academic accommodations due to a disability is requested to provide documentation to Disability Services located in the Bishop Wellness Center within the first two weeks of the semester.