Probability Distribution for Benefit/Cost Ratio and Net Benefit
Publication: Journal of Water Resources Planning and Management
Volume 118, Issue 2
Abstract
Benefit/cost ratio and net benefit are the two most commonly used criteria for evaluating the economic merit of public development projects. Due to the existence of uncertainty in cost and benefit estimations, the benefit/cost ratio and net benefit cannot be quantified with absolute certainty. In most probabilistic benefit/cost analysis the probability distributions of the benefit/cost ratio are chosen arbitrarily. The intent of this paper is to present the results from a numerical experiment in attempting to identify the appropriateness of various commonly used probability distributions in describing the random behavior of the benefit/cost ratio and net benefit of an economic development project.
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Information & Authors
Information
Published In
Journal of Water Resources Planning and Management
Volume 118 • Issue 2 • March 1992
Pages: 133 - 150
Copyright
Copyright © 1992 ASCE.
History
Published online: Mar 1, 1992
Published in print: Mar 1992
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