While accounting for spillovers such as land reallocation raises the benefit-cost ratio
for the programme across an array of scenarios, arguments exist that the programme's costs still outweigh the benefits.
Implication 4: Bureaucratic BCA focuses almost exclusively on the benefit-cost ratio
(or related summary metrics) as a way to justify a desired policy or project, rather than using more detailed tools to understand the risk and uncertainty associated with various alternatives.
This ratio is called as the benefit-cost ratio
in which it measures dollars saved per every dollars spent on intervention.
The Government's own figures showed that because of the economic climate, the benefit-cost ratio
of the project (including wider economic benefits) had reduced slightly, although the figure still remained "convincing".
Matching these direct and indirect benefits against program costs provides a benefit-cost ratio
for the action.
The above benefit-cost ratio
should be 1 or higher.
Two common measures of benefit-cost performance are used, the benefit-cost ratio
and the net present value (Net Present Value).
It enjoys a benefit-cost ratio
in excess of 4:1 when the Department of Transport hurdle rate is just 2:1.
The average cost of treatment over the 9 months postbaseline was $1,583 ($3,336 unweighted) and the corresponding benefits were $11,487 (CI = $9,784, $13,180), for a benefit-cost ratio
of more than 7:1, or 3:1 using unweighted costs.
Some authors caution against using a benefit-cost ratio
approach, however, because deciding whether a given variable is considered a cost or a benefit can have a large impact on the final benefit-cost ratio
(Drummond et al.
In September 2003, the DOT's research arm, the Volpe Center, estimated a benefit-cost ratio
for mandatory installation of EFVs between 0.
Hill and Wehman (1989) calculated the benefit-cost ratio
1 to 1.