Scandinavian Working Papers in Business Administration
Working Papers,
Örebro University, School of Business
No 2012:5: A Comparison of Benefit Cost and Cost Utility Analysis in Practice: Divergent Policies in Sweden
Lars Hultkrantz () and Mikael Svensson ()
Additional contact information
Lars Hultkrantz: Department of Business, Economics, Statistics and Informatics, Postal: Örebro University, Örebro University School of Business, SE - 701 82 ÖREBRO, Sweden
Mikael Svensson: Department of Economics, Postal: Karlstad University, Karlstad University Business School, SE - 651 88 KARLSTAD, Sweden
Abstract: We compare state-of-the-art implementation of Benefit Cost Analysis (BCA) and Cost Utility Analysis (CUA) as tools for making priorities in allocation of national public funds in the transport sector and health sector, respectively, in Sweden. While the principal distinctions between these methods are well known, less notice has been given to a number of other differences that have emerged as national and international practices have evolved over time along separate lines. We compare cost and benefit components and economic parameter values and find some surprising disparities. There are inconsistencies, both across methods and within each method. Both can be improved by learning from the other. We also find that some current practices conflict with the underlying welfare theory and/or insights from recent empirical analysis.
Keywords: Benefit Cost Analysis; Cost Utility Analysis
27 pages, April 3, 2012
Full text files
wp-5-2012.pdf
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