Assignment instructions
As a Public Policy Analysts, you are requested by the government of GOJ to analyze this project and make recommendations for the government to make a Pareto-efficient decision on the project. You are supposed to undertake the following:
1. You should analyze and discuss the project using the SSP Institutional Impact Theory. More specifically identify the following with respect to the project.
i) Joint-impact-goods
ii) Incompatible-use goods
iii) High-exclusion-goods
iv) Externalities
v) Free riders
vi) Human interdependency and who gets what?
2. Your task is to undertake a complete cost-benefit analysis of the proposed highway project based on the project information and details given above, assuming the GOJ will continue to run the highway as a toll road after handing over in 2033 until 2058. You should calculate:
i. Market cost-benefit analysis,
ii. Private cost-benefit analysis,
iii. Efficiency cost-benefit analysis and
iv. Referent Group Analyses
3. While GOJ uses a 6% discount rate (real) for public sector investment decision-making, you should also undertake a sensitivity analysis at 9% and 12%. It is understood that the concessionaire requires a minimum return of 12% (real) on its equity.
