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Green book: 6 - VALUATION OF COSTS & BENEFITS (Specific approaches to…
Green book: 6 - VALUATION OF COSTS & BENEFITS
This includes which costs & benefits to include and approached to non-market valuation
It covers land use valuation
Assets & Infrastructure
Valuation of risks to life & health
Natural capital and travel time
Opportunity Cost
Reflects the best alternative use a good or service could be put to
Market Prices is the starting point for this calculation
Understand the importance the'best alternative use of an asset being valued, better alternatives may exist
The opportunity cost of labour includes:
Employees time based on Full Time Equivalent (FTE)
Pension costs
National Insurance
Allowances, benefits & Basic salary
Employment & Productivity effects
Typically lead to higher wages, rather than higher employment
Productivity effects may arise from movement to more or less productive jobs
Changes in the structure of the UK economy
Benefits that arise through close location of businesses and/or people
Private Investment
Product market competition or the generation and flow of ideas
Economic Transfers
Residual Values & other adjustments
Multiplier effects should not be used
Multiplier effects are further economic activities which result from either labour supply or direct labour demand effects
Temporary deviations from trend growth should not be counted in the overall appraisal of UK social value unless they can be demonstrated to have supply side effects.
If Multiplier effects do occur it is usually not possible to reliably observe or measure differences between individual programmes and options within projects at a UK level. Therefore avoid including them in estimates of Social Value.
Interventions which increase human capital, job search activity or provide better access to jobs can have positive labour supply and Macroeconomic effects
Interventions which increase human capital, job search activity or provide better access to jobs can have positive labour supply & Macroeconomic effects
Clear, objective labour supply can be included in appraisals
With robust, objective evidence supply chain effects may be used for local level analysis
They should not be counted in the overall appraisal of UK Social Value unless hey can be demonstrated to have supply side effects
Non Market valuation
Non-market price calculation & estimation
Valuation Methods for Non-Market Prices
Subjective Well-being approaches
Specific approaches to valuation
Land use values
Asset Maintenance
Asset Sales
Infrastructure
Valuing risks to life and health
Greenhouse as emissions & energy Efficiency Values
Assessing & Valuing effects on the natural environment
Travel time
PPP, Tax & other adjustments
Unmonetisable & unquantifiable cost & Benefits