Cost Benefit Analysis

This research presents a costbenefit analysis of the value of the Los Angeles Blue Line, a regional lightrail public transit system. Traditional costbenefit analyses performed on the Blue Line have generally concluded that costs outweigh the benefits (Moore, 1992, pp. 1825; Mydans, 1992, pp. 162165). The Blue Line, however, is intended to provide benefits that are not amenable to assessment through traditional costbenefit analysis, because it is difficult to measure the such things as the value of clear and clean air, or the future value of a different type of societal environment that the Blue Line may play a small part in creating. It should be noted that a traditional costbenefit analysis would find the American space program wanting, yet most Americans agree that the potential, yet difficult to measure, future value of the program outcomes justify current period costs of the program. This research does not suggest that the Los Angeles Blue Line is as significant as is the national space program. What is suggested is that the value of the Blue Line, as well as many other public programs, must, as is true of the national space program, be assessed through the application of an alternative procedure to traditional costbenefit analysis. An alternative costbenefit procedure is applied in this research to assess the value of the Los Angeles Blue Line. This alternative costbenefit analytical proce

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been found by traditional costbenefit analysis to result in a net increase in societal welfare, or the outcome may be the acceptance of a project found by traditional costbenefit analysis to result in a net decrease in social welfare. In effect, a weighting scheme alters the dollar values assigned to the various costs and benefits identified with a project. The application of the net present value criterion in such an analysis selects the project "with the greatest net benefits in terms of units of utility instead of absolute dollars" (Positer, 1988, p. 452). The use of distributional weights, thus, tends to "interpret the relative merits of alternatives as separate from their contributions to economic efficiency" (Positer, 1988, p. 452). In the application of distributional weights in costbenefit analysis, the standard weight is assumed to be unity (Harberger, 1978, p. S89). This standard weight applies to the average citizen, and to government. "When a particular group . . . is to be preferred, as against the average citizen, it is assigned a welfare weight . . . greater than one, and when it is to be 'dispreferred' . . . , its (weight) will be less than one" (Harberger, 1978, p. S90). Similarly, when a particular ben
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Approximate Word count = 2118
Approximate Pages = 8 (250 words per page)

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