cost-benefit analysis in perspective -...
TRANSCRIPT
Spatial Data Infrastructures
Cost-Benefit Analysis in Perspective
Arnold Bregt, 15 October 2012 JRC
Content
n Cost-Benefit analysis in SDI
n Reflection on Cost-Benefit analysis
n Other Approaches
n Conclusions
2/14
Cost-Benefit analysis in SDI
n Various Cost-Benefit Analysis done
3/14
INSPIRE Costs (estimated in 2003)
4/14 Inspire Consolidation team, 2009
INSPIRE Benefits (estimated in 2003)
5/14 Inspire Consolidation team, 2009
Summary
n Benefits 7-8 times costs (INSPIRE studies)
n Detailed case-studies (Catalonia (2007) and Lombardia (2008-2009) (clear benefits)
n Netherlands (2009): benefits 2 times costs
6/14
Dutch Case INSPIRE
7/14 Ecorys, 2009
Dutch Cost-Benefits Timeline
8/14 Ecorys, 2009
Reflection on Cost Benefit analysis
n Po’s: l Easy to understand l Loved by policy makers l Translation of all aspects into monetary terms l Looks exact (numbers)
9/14
Reflection on Cost Benefit analysis
n Con’s: l Some aspects cannot be translated into monetary
terms l Not really suitable for complex issues l Limits decision making to economic arguments l Some times not believed by policy makers l Costs are now benefits (much) later
10/14
Esra Klein n I've been on both the producing and receiving end
of too many cost benefit analyses to trust them. If you're being relatively honest and if you're dealing with fairly concrete, short-term issues, they're useful tools, but even then it's still the case that you can manufacture strikingly divergent conclusions by manipulating your assumptions and inputs by surprisingly small amounts. Cost-benefits usually look like they're grounded in hardheaded thinking simply because they're numerically based, but quite often they're nothing of the kind.
11/14
Characterisation of INSPIRE
n Very complex process (Complex adaptive system)
n Emergent properties n A lot of small interventions n Cause effect relations are not or hardly known
12/14 Grus et al., 2011 “SDI as CAS”
Cost-Benefit INSPIRE
n Cost-Benefits were done for INSPIRE l They had their role in the beginning (just to start) l Now they can even have a negative effect (see next
slide)
n Maybe time for another approach
13/14
Reverse “pyramid effect”
14/14
EU level
National level
Local level
Costs Benefits
Other Approaches:
n Reference class forecasting (Kahneman and Tversky):
n Approach l 1.Identify a reference class of past, similar projects. l 2.Establish a probability distribution for the selected
reference class. l 3.Compare the specific project with the reference class.
n I have no experience
15/14 Kahneman, 2011 "Thinking, Fast and Slow,"
Goal oriented assessment
16/14 Grus et al., 2011. CEUS
More detail
17/14
More detail
18/14
Goal oriented assessment
n Developed for Dutch SDI
n Used for evaluation (Impact of open topographic data)
n Used for Liander (gas, electra utility company)
19/14
Application on open topographic data
20/14
Conclusions
n Cost benefit analysis had their role in the past n (mainly done before the project)
n For a extremely complex project as INSPIRE they are not the right tool
n We need to look for alternatives
21/14
Thank you!
22/19