Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2010:15: Dynamic cost-benefit analysis of large projects: The role of capital cost

Chuan-Zhong Li () and Karl-Gustaf Löfgren ()
Additional contact information
Chuan-Zhong Li: Department of Economics, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden
Karl-Gustaf Löfgren: Umeå University, Postal: Department of Economics , 901 87 Umeå, Sweden

Abstract: This paper derives a dynamic cost-bene…t rule for evaluating large projects.We show that, in addition to the conventional income and consumer surplus measures, the rule also entails an extra term involving capital cost changes.

Keywords: cost-benefit rule; large project; capital cost

JEL-codes: D60; D90; H40

8 pages, May 26, 2010

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