Benefit-cost analysis tool (IRP2-WP3)

Overview

In this work package we have developed a Benefit: Cost Analysis (BCA) Tool tailored to assessing investments for water-sensitive cities. It is intended to support balanced and systematic decision making about these investments, and to provide evidence for use in business cases. The tool is based on sound economics and is fully consistent with guidelines prepared by Australian state and national governments.

Three different groups of users, with different needs, are envisaged for the tool.

Experienced economists. For this group, the aim is to provide a standard BCA tool that is flexible, convenient and easy to use. The tool should foster good BCA practice and enhance the comparability of different BCAs.

Non-economists who have been trained. For this group, the aim is to put BCA within the hands of sufficiently trained users who lack a previous background in economics. The tool should help these users avoid common errors and overcome challenges.

Managers who wish to understand BCA better. For this group, the aim is for them to become well-informed and effective purchasers of BCA services.

The BCA Tool is part of a broader package of economic tools and resources, known as INFFEWS (Investment Framework For Economics of Water Sensitive cities). Another component of INFFEWS is the benefit-transfer tool, which provides information about monetary-equivalent values of non-financial benefits generated by investments in water-sensitive cities.

INFFEWS BCA Tool (beta version)

The INFFEWS BCA Tool is a package consisting of the following components.

  1. Benefit: Cost Analysis and Strategic Decision Making (pdf document): Covers BCA basics, guidance on strategic issues related to BCAs, and use of economic information, including BCAs, in strategic decision making.
  2. Rough BCA Tool - Guidelines (word document) and spreadsheet (excel): for a “Rough” BCA. This responds to the need for a very simple tool that captures the essence of BCA. It can also be useful as a first step towards conducting a full BCA.
  3. BCA Tool Spreadsheet (Excel): Captures qualitative and quantitative information, calculates BCA results and conducts sensitivity analysis to test the robustness of results.
  4. BCA Tool Guidelines (pdf document): Explains the structure and elements of the BCA Tool; information requirements and judgements needed to apply the tool; and suggested strategies for obtaining data for different parts of the tool.
  5. BCA Tool User Guide (pdf document): Provides a step-by-step process for entering the required information into the BCA Tool. Includes a template for capturing the qualitative aspects of that information.
  6. BCA Comparison Tool (excel): Makes it easy to compare the results from BCAs for multiple projects, or different versions of the same project.
  7. BCA Tool Training Resources. Under development.

Downloading Files

To download these files and review the beta version of the INFFEWS BCA tool, please make sure you are logged in as a CRCWSC Participant (log in is located at the top right hand corner of website).  Then click on the below "Register Here" button.  You will be directed to a registration page to enter your details, and then to the download page.  Please note, the files must not be distributed or shared with anyone as they are draft versions of the tools and guidelines, and the final versions will be released after updates and further testing in case studies have been conducted.

Please provide your feedback to IRP2 team member Tammie Harold (tamara.harold@uwa.edu.au)  who will record and pass on the specific comments and questions about the tool to the developer and, where possible, address any general questions or clarifications. We are keeping a record of who has obtained a copy of the beta version and may contact you for your feedback.

Last updated: 2nd Feb 2017