THE OHIO STATE UNIVERSITY	Autumn Quarter 2008
City and Regional Planning	Professor Philip A. Viton

City and Regional Planning 763 — Consequence Analysis in City and Regional Planning

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Course Description and Objectives

This course is a theoretical and practical synthesis of methodologies for evaluating large-scale public projects, such as transportation, water resources, urban infrastructure, or environmental projects. The major concern of the course is cost-benefit analysis under conditions of certainty, and its application to socio-economic project evaluation.

Individual sections of the Philadelphia Center City Commuter Connection (CCCC) Environmental Impact Statement (the CCCC EIS), which is an illustration of cost-benefit analysis in practice are available for download in PDF for on the 763 website (see below).

Course Organization

Lectures.

The mid-term examination will count for 40% of your final grade. This is a closed-book examination; you should be sure to bring a calculator.

The final examination will count for 60% of the final grade. This is also a closed-book examination, and you should also be sure to bring a calculator. The final examination will cover all material in the course (not just the material covered since the mid-term).

Texts

To supplement the crystalline clarity of the lectures, we will rely on readings: most of these will be available for download in PDF format from the course website.

Problem Sets

A collection of problems and answers in cost-benefit analysis is available as part of the course packet: it is also available for download: see http://facweb.knowlton.ohio-state.edu/pviton/courses2/crp763/psas.pdf. These are something like the questions you can expect on the exams, but are harder (in the sense of requiring more time). I strongly recommend that you work through the problems on your own. Copies of last year’s midterm and final exams are also available online.

Course Website

I have established a small website for the course. Address: http://facweb.knowlton.ohio-state.edu/pviton/courses2/crp763/index.html. This contains versions of the syllabus in which all links are “live”: you may wish to download a copy of one of these, or at least bookmark the location.

I’ll put general course announcements there, and perhaps the occasional supplementary lecture note. It’s also a source for some materials on the reading list, and for the CCCC EIS.

In June of 2000, there was a special issue of the Journal of Legal Studies discussing philosophical and legal aspects of cost-benefit analysis. We shall not be covering those aspects in the course; but if you are interested, the papers are available via links on the 763 Website.

Email

As many of you know, I filter spam aggressively; the downside is that I may accidentally delete real mail. You can minimize the chances of this happening when sending me email by (1) making sure that the From field uses your osu.edu address, and (2) including CRP (or C&RP) somewhere in the subject line. If I still don’t answer in a day or two, please ask me about it.

Useful Sources

Here are some additional sources (beyond those used in the reading list). Most are available in the Business School library.

General Intermediate Treatments

Fremont J. Lyden and Ernest G. Miller, editors. Public Budgeting: Program Planning and Implementation. Prentice-Hall, Englewood Cliffs, NJ, 1982.

E. J. Mishan. Cost-Benefit Analysis: A Handbook. Praeger, New York, NY, 1976.

Peter G. Sassone and William A. Schaffer. Cost-Benefit Analysis: A Handbook. Academic Press, NY, 1978.

J. Schofield. Cost-Benefit Analysis in Urban and Regional Planning. Allen and Unwin, London, UK, 1978.

Ronald D. Sylvia. Program Planning and Evaluation for the Public Manager. Brooks-Cole Publishing Co., Monterey, CA, 1985.

General Advanced Treatments

Alan Auerbach and Martin Feldstein, editors. Handbook of Public Economics. North Holland, New York, NY, 1985.

R. E. Just, D. L. Hueth, and A. Schmitz. Applied Welfare Economics and Public Policy. Prentice-Hall, Englewood Cliffs, NJ, 1982.

Specialized Topics

Hans A. Adler. Economic Appraisal of Transport Projects: A Manual With Case Studies. Johns Hopkins University Press for The World Bank, Baltimore, MD, 1987.

Samuel B. Chase. Problems in Public Expenditure Analysis. The Brookings Institution, Washington D.C., 1968.

V. Kerry Smith. Environmental Policy Under Reagan’s Executive Order: The Role of Benefit-Cost Analysis. University of North Carolina Press, Chapel Hill, NC, 1984.

Howard Raiffa. Decision Analysis: Introductory Lectures on Choices Under Uncertainty. Addison-Wesley, Reading MA, 1968. (One of the clearest and most accessible books I know of).

Avinash K. Dixit and Robert S. Pindyck. Investment Under Uncertainty. Princeton University Press, Princeton, N.J., 1994. (More advanced than Raiffa).

Course Outline and Reading List

*: required reading; **: optional

Link to PDF versions of Readings: http://facweb.knowlton.ohio-state.edu/pviton/courses/crp763/index.html. Note that you will need to login specially for this site: unlike the main CRP 763 site, it is not public. Your logon name and password is your KSA login name and password (not your University ones). If your user name gets rejected, try prefacing it with knowlton\ (so, eg, knowlton\pviton). If you still have problems, send me an email.

Introduction: Market Failure; Role of Government

*

Edward M. Gramlich. A Guide to Cost-Benefit Analysis. Prentice-Hall, Englewood Cliffs, NJ, 1990, Chs. 1 – 2

**

Peter O. Steiner. “The public sector and the public interest”. In The PPBS System, pages 13–45, Government Printing Office, Washignton D.C., 1969. Joint Economic Committee, 91st Congress. PDF version available

1 Introduction to Cost-Benefit Analysis

*

Richard Layard and Stephen Glaister. “Introduction”. In Richard Layard and Stephen Glaister, editors, Cost-Benefit Analysis, pages 1–58. Cambridge University Press, 1994. Skim now, and come back to it as we cover the individual topics.

*

Edward M. Gramlich. A Guide to Cost-Benefit Analysis. Prentice-Hall, Englewood Cliffs, NJ, 1990, Ch. 3.

**

Kenneth A. Small. “Project evaluation”. In Jose Gomez-Ibanez, William B. Tye, and Clifford Winston, editors, Essays in Transportation Economics and Policy, pages 137–179, Washington D.C., 1999. Brookings Institution.

2 Discounting and The Problem of Time

*

Edward M. Gramlich. A Guide to Cost-Benefit Analysis. Prentice-Hall, Englewood Cliffs, NJ, 1990, Ch. 6.

*

John Broome. “Discounting the future”. Philosophy and Public Affairs, 23(2):128–156, 1994. PDF version available

**

Cass R. Sunstein and Arden Rowell. “On discounting regulatory benefits: Risk, money, and intergenerational equity”. University of Chicago Law Review, 74:171–208, Winter 2007

3 Consumer Benefits and Their Measurement

*

Edward M. Gramlich. A Guide to Cost-Benefit Analysis. Prentice-Hall, Englewood Cliffs, NJ, 1990, Ch. 4, pp. 48–59.

*

Edward R. Morey. “Confuser surplus”. American Economic Review, 74(1):163–173, 1984. PDF version available

**

R. D. Willig. “Consumer’s surplus without apology”. American Economic Review, 66(4):589–97, 1976. PDF version available

4 Shadow Prices and Unmarketed Goods

*

Edward M. Gramlich. Benefit-Cost Analysis of Government Programs. Prentice-Hall, Englewood Cliffs, N.J., 1981, Ch. 5, pp. 53–75.

**

M.W. Jones-Lee. “Safety and the saving of life: The economics of safety and physical risk”. In Richard Layard and Stephen Glaister, editors, Cost-Benefit Analysis, pages 290–318, Cambridge, U.K., 1994. Cambridge University Press.

**

MVA Consultancy. “Time savings: Research into the value of time”. In Richard Layard and Stephen Glaister, editors, Cost-Benefit Analysis, pages 235–271, Cambridge, U.K., 1994. Cambridge University Press.

5 Project Costs and their Finance

*

Robert W. Hartman. “One thousand points of light seeking a number: A case study of CBO’s search for a discount rate policy”. Mimeo, delivered at the winter meeting of the American Economic Association, 1968. Read Appendix, pp 1–7; other parts of the Appendix optional. The paper is included in the readings for section 3.

*

Charles L. Ballard and Don Fullerton. “Distortionary taxes and the provision of public goods”. Journal of Economic Perspectives, 6(3):117–132, 1992. PDF version available

**

Don Fullerton. “Reconciling recent estimates of the marginal welfare cost of taxation”. American Economic Review, 81(1):302–308, 1991. PDF version available

**

John P. Hoen and Alan Randall. “Too many projects pass the benefit-cost test”. American Economic Review, 79(3):544–551, 1989. PDF version available

6 Income Distribution

*

Edward M. Gramlich. A Guide to Cost-Benefit Analysis. Prentice-Hall, Englewood Cliffs, NJ, 1990, Ch. 7.