Issues in Estimating Benefits with Non-Market Methods

This working paper concerns the estimation of benefits used in the evaluation of development projects, especially those within public facilities or environmental projects. The estimation of benefits uses a variety of techniques, both contingent valuation and behavioral techniques. Benefit measures presumably have an important role in the allocation of funds for development banks. The consequence of inappropriate project analysis is that lending will increase debt burdens without corresponding economic and social benefits. This paper also reviews the methods for evaluating projects, especially projects with multiple design options.