Dynamic cost–benefit analysis of large projects: The role of capital cost

This paper derives a dynamic cost–benefit rule for evaluating large projects. We show that, in addition to the conventional income and consumer surplus measures, the rule also entails an extra term involving capital cost changes.

Keywords: capital cost, cost-benefit rule, large project

Li, C.-Z., and K.-G. Löfgren. 2010. Dynamic cost–benefit analysis of large projects: The role of capital cost. Economics Letters 109:128–130.