This paper reviews recent developments in cost–benefit analysis for water policy researchers who wish to understand the applications of economic principles to inform emerging water policy debates. The cost–benefit framework can provide a comparison of total economic gains and losses resulting from a proposed water policy. Cost–benefit analysis can provide decision-makers with a comparison of the impacts of two or more water policy options using methods that are grounded in time-tested economic principles. Economic efficiency, measured as the difference between added benefits and added costs, can inform water managers and the public of the economic impacts of water programs to address peace, development, health, the environment, climate and poverty. Faced by limited resources, cost–benefit analysis can inform policy choices by summarizing trade-offs involved in designing, applying, or reviewing a wide range of water programs. The data required to conduct a cost–benefit analysis are often poor but the steps needed to carry out that analysis require posing the right questions.
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Research Article| September 27 2011
Cost–benefit and water resources policy: a survey
Frank A. Ward
1Department of Agricultural Economics and Agricultural Business, New Mexico State University, Las Cruces, NM 88011, USA
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Water Policy (2012) 14 (2): 250–280.
February 07 2011
July 04 2011
Frank A. Ward; Cost–benefit and water resources policy: a survey. Water Policy 1 April 2012; 14 (2): 250–280. doi: https://doi.org/10.2166/wp.2011.021
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