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Investigation of cost-benefit analysis as a tool in the evaluation of urban plans Barua, Anil Kanti

Abstract

The focus of this study is on the application of cost-benefit analysis as a methodological technique for evaluating alternatives in the urban planning process. It is hypothesized that cost-benefit analysis, by identifying the effects and the incidence of various courses of action, provides a basis for objective evaluation of alternative plans. It is assumed that cost-benefit analysis, an economics tool, is a framework within which the various effects can be considered comprehensively. The method of study is primarily a critical review of the literature. Within the available time and resources, an attempt is made to apply the cost-benefit techniques to selected areas in the City of Vancouver. Because of the magnitude of the problem involved in the collection of considerable data, most of which is apparently unavailable in a readily applicable form, evidence for the verification of the hypothesis is largely drawn from the critical evaluation of the literature. The study first focusses on the general concept of cost-benefit analysis, as it appears to be traditionally applied, in a broad perspective of various methodological techniques of plan evaluation. A review of the cost-benefit techniques advanced by Nathaniel Lichfield, Jerome Rothenberg and James CT. Mao reveals the fact that there is a difference in their basic approach to urban development. Lichfield's "balance sheet" traces the effects of development in relation to the various sectors involved in the development process. Mao suggests that the repercussions be traced in relation to the basic objective of the project. Rothenberg is primarily concerned with the distribution of income among the relevant populations involved in the process of development. The authors point out the limitations of their techniques. There are many intangible and non-measurable items which are not treated by the authors. There is also the question of whether these tools are valid for evaluating urban plans. Though adequate data are not available to fully employ the above cost-benefit techniques, the limitations of the case studies, partly imposed by the theoretical formulation of these techniques lead to questions about the operational validity of these tools in evaluating the implications of these policies in the study areas. The study results reveal the practical problems encountered in obtaining comparable data, particularly on property value, social costs of slum living, and municipal expenditure and revenues for such small areas. A specific methodology needs to be developed for each to take these items into account. The problem of isolating certain effects and ascribing them to the redevelopment policy in the study areas is a critical one. Thus no valid conclusion with regard to the verification of the hypothesis can be drawn in the light of the case studies. It is concluded that the traditional concepts of "costs" and ""benefits" are not applicable in evaluating alternative urban plans and that cost-benefit analysis requires a broad interpretation as a framework within which the implications of a plan can be considered comprehensively and objectively in relation to the defined goals and objectives. The formulation of goals and objectives, it is evident, is an integral part of the analytical techniques. There are many intangible and non-measurable aspects which can not be treated adequately within the cost-benefit framework. However, one of the advantages of cost-benefit analysis is that the planners and the decision-makers may both become acquainted in greater detail with the trade-offs. Various other analytical methods lead to a more refined cost-benefit calculus for an objective evaluation of urban plans. It is important that the validity of methodological techniques should be judged not only by its operational aspects but also by its conceptual approach to achieve the goals of the urban planning process.

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