Table 3 Guidance related to perspective, comparator/base case, options for appraisal, time horizon and discount rate
Document title | Perspective and referent group | Comparator/base case | Options for appraisal, (number and specifications) | Time horizon | Discount rate theoretical foundation and value for primary analysis (range for sensitivity analyses) |
|---|---|---|---|---|---|
Cost–benefit analysis guidance note (2020) [33] | Societal: impacts on all Australian residents | Business as usual, do nothing | ≥ 3; 1 non-regulatory option | Life of policy; 10 years for regulatory costs [85] | Opportunity cost of capital: 7% (3% and 10%) |
Handbook of Cost–Benefit Analysis January (2006) [45] | Societal | Business as usual, do nothing | Not specified | Life of policy | Opportunity cost of capital: no values given |
Assessment framework: for initiatives and projects to be included in the Infrastructure Priority List (2018) [48] | Societal: Australian community | Do minimum | Step 1: high-level MCA on long list of options. Step 2: rapid CBA on short list and more detailed MCA. Step 3: detailed CBA on final short list (≥ 2 options) | Life of asset. Duration needs to be justified | Theory not stated: 7% (4% and 10%) |
Guidelines for preparing a submission to the Pharmaceutical Benefits Advisory Committee (2016) [31] | Healthcare system Optional: Societal | Existing technology/clinical practice replaced by the proposed medicine | Proposed new medicine | Duration to capture all important differences in costs and benefits between intervention and comparator | Theory not stated: 5% (0% & 3.5%) |
NSW Government Guide to Cost–Benefit Analysis (2017) [4] | Societal: NSW community | Business as usual, no policy change, status quo | Full range of realistic options; variations in scale and scope, targeting supply and demand, alternative implementation plans | Life of policy/asset; 20–30 years | Opportunity cost of capital: 7% (3% and 10%) |
Transport for NSW Cost–Benefit Analysis Guide (2019) [8] | Cites NSW Treasury guidance [4]: Societal: NSW community | Business as usual, do minimum | ≥ 3 for large projects and ≥ 2 for smaller projects | Life of asset. Cites NSW Treasury guidance [4] (30 years). No longer than 50 years | Social rate of time preference: cites NSW Treasury guidance [4]: 7% (3% and 10%) |
Guidelines for using cost–benefit analysis to assess coastal management options (2018) [7] | Societal: LGA community | Continuation of current management, business as usual | Number not specified. Options should be discrete and not reliant on other options. Variations in options treated as individual options | Life of project. Cites NSW Treasury guidance [4] (30 years). Longer time horizons can be adopted (e.g. 50 years) | Theory not stated: cites NSW Treasury guidance [4]; however, lower value differs: 7% (4% and 10%) |
Guide to Cost–Benefit Analysis of Health Capital Projects (2018) [37] | Cites NSW Treasury guidance [4]: Societal: NSW community | Status quo, keep safe and operating | Step 1: high-level CBA on long list of options. Stage 2: detailed CBA on short list (≥ 2 options) | Practical asset life; 20–30 years | Cites NSW Treasury guidance [4]: 7% (3% and 10%) |
Commissioning Economic Evaluations: A Guide (2017) [49] | Health sector Optional: whole of government, societal | Current practice | Not specified (focus of guidance on ex-post evaluations) | Length of time over which outcomes are likely to accrue | Reports recommended rates vary by jurisdiction. Cites NSW Treasury guidance [4]; however, a recommended rate not stated |