Cost-Benefit Analysis with Applications to Animal Health Programmes: Allowing for Project Risk in CBA

This discussion paper will briefly examine the concepts of risk and uncertainty, and the relevance of risk to decision making about animal health programs. Various techniques for dealing with uncertain cash flows will then be discussed, with particular emphasis on three extensions to the cost-benefit analysis, viz. sensitivity analysis, risk or venture analysis and stochastic dominance analysis. Finally, practical suggestions will be made as to choice of approach.