Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

3.4.1.5 Economic analysisThe following variables may provide a starting point for the identification of the benefits:- effective enrolment rates compared to potential ones,- the proportion of students repeating the year,- the percentage of pupils who complete the whole training course (drop-out rates),- the average attendance rate per pupil,- the achievement of pre-established, measurable learning standards,- the quality of pedagogic material,- the suitability of equipment and its rate of use,- the levels of preparation and commitment of the teaching staff, based on objective examination,- the fungibility of the pedagogical content in as many and varied contexts as possible.These projects are expected to have relevant social impacts on the labour market. The main benefits/costsand externalities could be as follows:BenefitsCosts- The number (or percentage) of pupils who have found (or who are expected to find) productiveemployment and who, without this specific training, would have been unemployed or under-employed.Forecasts for this variable can be based on the long term studies carried out in other countries or regions- If the priority is to improve the opportunities of potential students in the labour market, the benefits maybe quantified and valorised by the expected increased income of the students due to the training received(avoided under-employment, better positioning on the market)- An alternative method, is to refer to the willingness-to-pay, valuable as the average fees students wouldhave to pay to take similar private courses. Great care should be taken when following this method due topossible estimation bias: e.g. there may be a difference in quality between the training offered by theinvestment and what is already available privately, or there may be differing degrees of risk aversionaccording to income levels, and so forth- Apart from the costs listed in the financial analysis as converted in economic prices, the only costs thatmight be considered are the ones due to increased transport flows in a congested urban area3.4.1.6 Risk assessmentCritical factors- Investment and operating costs- The demographic dynamics in the catchment’s area- The success of the educational programmesMainvariablesto consider- The rate of growth of the population in the catchment’s area- The future composition of the population in the catchment’s area- The current enrolment rate- Effective enrolment rates compared to potential ones- The percentage of pupils who complete the whole training3.4.1.7 Other project evaluation approachesSometimes it is helpful to have an independent evaluation, from a panel of qualified experts, of the ability ofthe educational investment to meet the proposed objectives and social needs, along with an assessment ofthe suitability of the types of training programmes.119