Page 110 - DMGT302_FUNDAMENTALS_OF_PROJECT_MANAGEMENT

Anand Thakur, Lovely Professional University Unit 6: Social Cost Benefit Analysis

Unit 6: Social Cost Benefit Analysis Notes

CONTENTS
Objectives
Introduction
6.1 Rationale for Social Cost Benefit Analysis

6.2 UNIDO Approach for Social Cost Benefit Analysis
6.3 Methods followed by Financial Institutions
6.4 Summary
6.5 Keywords
6.6 Review Questions
6.7 Further Readings

Objectives

After studying this unit, you will be able to:
Know about rationale for social Cost benefit analysis;

Understand UNIDO approach for social cost benefit analysis;
Know about the methods followed by financial iInstitutions.
Introduction

It refers to the study of feasibility of a project in terms of its total economic cost and total
economic benefits. It means to compare total cost with total benefit if we add external cost with
private cost, it’s called total social cost if we add external benefit with private benefit, called total
social benefit.

6.1 Rationale for Social Cost Benefit Analysis?

Social Cost benefits Analysis means to analyze the social cost and total social benefits if we
accept any project. We all know that for completing the big project, we need big investment. In
Social Cost Benefit Analysis (SCBA), we see whether return or benefits on this investment are
more than its cost from point of view of society in which we are living.
In public investment, we analyze and compare government expenditure with total benefits to
society through SCBA. It is also good technique of financial evaluation of a project because
we leave that project whose benefits to society are less than total cost which will to society
because all resources are from society. Problems which can be solved by Social Cost Benefits
Analysis.

Notes Social Cost Benefits Analysis means to analyze the social cost and total social
benefits if we accept any project.

LOVELY PROFESSIONAL UNIVERSITY 105