AgEconPlus uses benefit cost analysis and other standard analytical techniques in the assessment of projects and policy proposals. Impact assessment is completed using both Input-Output Analysis and Computable General Equilibrium modelling.
Benefit Cost Analysis
AgEconPlus completes comprehensive benefit cost analyses that recognise best practice in triple bottom line reporting. Economic, environmental and social values, equity considerations, sensitivity testing and threshold value analysis are built into frameworks specified by the World Bank, the Australian Government Department of Finance and NSW Treasury.
Multi-criteria analysis is a structured framework for investigating, analysing and resolving decision problems constrained by multiple objectives and criteria. It is seen by many as an alternative to Benefit Cost Analysis primarily because it does not require all impacts to be expressed in monetary units. Multi-Criteria Analysis may be appropriate when difficult to quantify social and environmental values outweigh purely financial considerations.
Input-Output Analysis is used to develop a ‘snapshot’ of an existing industry in a particular year including its direct and indirect linkages. Input-Output Analysis can also be used to assess the effects of a change or ‘shock’ to the local, regional or national economy. A ‘shock’ might include the beneficial impacts of a new industry on a local economy or the impact of closing an existing employer.
Computable General Equilibrium Analysis
Computable General Equilibrium Analysis is less suited to producing economic ‘snapshots’ of an industry but is well suited to assessing the effects of a change or ‘shock’ to the economy. Computable General Equilibrium Analysis takes into account structural adjustments brought about by large economic ‘shocks’.