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Table 3 Guidance related to perspective, comparator/base case, options for appraisal, time horizon and discount rate

From: A cost–benefit analysis framework for preventive health interventions to aid decision-making in Australian governments

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
  1. CBA cost–benefit analysis, LGA local government area, MCA multi-criteria analysis, NSW New South Wales, OBPR Office of Best Practice Regulation, PM&C Prime Minister and Cabinet