Benefit valuation for a Cost-Benefit Analysis in the context of developing nations

Cost Benefit Analyses can be useful tools for the appraisal of infrastructure projects and policies. The literature and guidance documents on the application of the CBA methodology are extensive. Moreover, the vast majority of this literature is focused on applications in upper and upper-middle countries (developed nations). This paper adds to this literature by exploring the issues of undertaking a benefit valuation exercise, as part of a CBA, in the context of developing nations. It provides an overview of the different methodologies to value benefits and offers guidance on some of the issues that may arise when such methodologies are implemented in a developing nation. This paper also offers general guidance to ensure a benefit valuation exercise provides a helpful tool to appraise a project in the context of a developing nation.

Contingent valuation: what needs to be done?

Contingent valuation (CV) has been argued to have theoretical advantages over other approaches for benefit valuation used by health economists. Yet, in reality, the technique appears not to have realised these advantages when applied to health-care issues, such that its influence in decision-making at national levels has been non-existent within the health sector. This is not a result of a lack of methodological work in the area, which has continued to flourish. Rather, it is a result of such activities being undertaken in a rather uncoordinated and unsystematic fashion, leading CV to be akin to a ‘ship without a sail’. This paper utilises a systematic review of the CV literature in health to illustrate some important points concerning the conduct of CV studies, before providing a comment on what the remaining policy and research priorities are for the technique, and proposing a guideline for such studies. It is hoped that this will initiate some wider and rigorous debate on the future of the CV technique in order to make it seaworthy, give it direction and provide the right momentum.