Search results

RECENT YEARS have witnessed the proliferation of applications of cost‐benefit analysis to public sector expenditure. Cost‐benefit analysis is a method of decision‐making which seeks to quantify the benefits that are obtainable from a given course of action, to express them in financial terms (or in terms of financial equivalents) and then to deduct the estimated social and financial costs so that the results of the course of action may be assessed, valued and expressed in monetary terms. Quantification of actual financial costs and benefits poses no difficulties, but it has been shown elsewhere that the quantification of social costs and benefits often poses considerable problems. Some social benefits, such as the value of time‐saving, can be quantified reasonably successfully (using, for example, financial equivalents of time saved in terms of average wages or average salaries of the individuals concerned), but others, such as the measurement of alleviation of suffering or the assessment of degrees of incapability in nursing care, have no adequate financial equivalents.

Because of the dramatic increase in health care costs and the fact that more people are retiring earlier and living longer, the issue of post retirement benefit costs other than pensions has become a topic of great interest to issuers and users of financial statements.The Financial Accounting Standards Board is in the process of requiring corporations to report these expected future post retirement costs as liabilities. This paper examines the proposed treatment of post retirement benefits costs and discusses alternative strategies a company may adopt to prepare for implementation of the standard.

In our era of scarcity, there is renewed interest in weighing benefits against costs. Today, library managers must do more than set goals; they must also consider the cost of attaining the goals. The methodology for this kind of assessment has been around for decades. Most depend on certain common elements: how to analyze and measure costs, benefits, and discount factors, and how to apply decision rules.

Fringe benefits may add 15 to 30 percent to the real cost of labor in your institution! If you are responsible for the budget, they could have both a professional and personal effect on you. Library literature contains few studies that compare or even document the costs of fringe benefits by kind or geographic location of the library. Almost every survey comparing salaries and the number of workers in the field excludes fringe benefit costs.

This paper presents the result of a study to identify the costs and benefits of obtaining ISO 9000 certification. Toward this goal, a survey of some 500 ISO 9000 certified companies has been carried out. Among them, more than 65 per cent believe that ISO 9001 certification is worthwhile, and more than 76 per cent believe that the cost of certification is inexpensive. The results indicate that companies which seek certification because of their customers’ request seem to gain less benefit from ISO 9000 certification. We also found that concern for high costs is much less after initial certification. In addition, we discovered that contrary to many people’s expectation, some factors do not have any bearing on whether benefits outweigh costs. These factors include time taken to get certified, number of years since certification, and reason for certification. Besides presenting the results of the survey, we also introduce a new classification scheme based on the company’s view on the “expensiveness” of the certification and the received benefits. There are some differences in responses from companies of different classes.

This study proposes targeted modernization of the Department of Defense (DoD's) Joint Forces Ammunition Logistics information system by implementing the optimized innovative information technology open architecture design and integrating Radio Frequency Identification Device data technologies and real-time optimization and control mechanisms as the critical technology components of the solution. The innovative information technology, which pursues the focused logistics, will be deployed in 36 months at the estimated cost of $568 million in constant dollars. We estimate that the Systems, Applications, Products (SAP)-based enterprise integration solution that the Army currently pursues will cost another $1.5 billion through the year 2014; however, it is unlikely to deliver the intended technical capabilities.

The European Union’s Digital Markets Act (DMA) calls for far-reaching changes to the way economic activity will occur in EU digital markets. Before its remedies are imposed, it is critical to assess their impacts on individual markets, the digital sector, and the overall European economy. The European Commission (EC) released an Impact Assessment in support of the DMA that purports to evaluate it using cost/benefit analysis.

An economic evaluation of the DMA should consider its full impacts on dynamic competition. The Impact Assessment neither assesses the DMA's impact on dynamic competition in the digital economy nor evaluates the impacts of specific DMA prohibitions and obligations. Instead, it considers benefits in general and largely ignores costs. We study its benefit assessments and find they are based on highly inappropriate methodologies and assumptions. A cost/benefit study using inappropriate methodologies and largely ignoring costs cannot provide a sound policy assessment.

Instead of promoting dynamic competition between platforms, the DMA will likely reinforce existing market structures, ossify market boundaries, and stunt European innovation. The DMA is likely to chill R&D by encouraging free riding on the investments of others, which discourages making those investments. Avoiding harm to innovation is critical because innovation delivers large, positive spillover benefits, driving increases in productivity, employment, wages, and prosperity.

The DMA prioritizes static over dynamic competition, with the potential to harm the European economy. Given this, the Impact Assessment does not demonstrate that the DMA will be beneficial overall, and its implementation must be carefully tailored to alleviate or lessen its potential to harm Europe’s economic performance.

The application of benefit–cost analysis principles by the Federal Aviation Administration (FAA) to a major infrastructure investment proposal – the expansion of Chicago O’Hare International Airport – is analyzed. The City of Chicago is proposing a major physical expansion of O’Hare Airport, which is but one of the alternative solutions to the high level of passenger delays that are currently experienced. The FAA must approve benefit–cost analyses done by the City in order for it to be eligible for federal funding. In the course of this process, the City has prepared two alternative benefit–cost studies of the proposed expansion. The analytic framework and empirical approach of both analyses is described, the results summarized, and the methods and estimates critiqued. It is concluded that neither study provides an estimate of net national benefits that meets minimal accepted professional standards. Finally, an overall assessment of the federal government process in considering and approving benefit–cost studies is provided, and suggestions for improving this process are offered.