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UBC Theses and Dissertations

An Investigation of the utility of benefit-cost analysis in waterfront allocation Hankin, Richard Alfred

Abstract

The purpose of this thesis was to investigate the following hypothesis: "that Benefit-Cost analysis is a suitable and sufficient technique for the allocation of waterfront to competing uses." The greatest stress is placed on the technique by limiting the meaning of "allocation" to problems involving mutually exclusive uses which compete for the same waterfront site. In this context choice of the best from a number of suitable sites for a use or of the most efficient scale of a project on a site are not considered to be allocation problems. Chapter I defines the waterfront and its elements— the shoreline, foreshore, and adjacent water areas—and discusses its major uses, extent, interrelationships, and multiple-use potential. Also discussed is the historical importance of the waterfront and some public attitudes which have fostered careless waterfront allocation and use. Thus, the need for comprehensive waterfront allocation procedures is established. The second Chapter briefly reviews Benefit-Cost theory and methods and discusses some problems of application. While acknowledging the extensive theoretical debate concerning the technique, it is outlined as it is currently-used in water-resource development programmes. Chapter III applies Benefit-Cost analysis to a specific waterfront allocation problem involving partly real-partly hypothetical port and recreation development proposals for the same site. Benefits, costs, and benefit-cost ratios are estimated for each of the two alternatives. Then basic assumptions with respect to the availability of other sites, the evaluation context, and timing are varied to examine the effects on the relative benefit-cost ratings of the two proposals. Problems of intangibles and of providing the necessary background for analysis are also discussed. The final Chapter summarizes the major conclusions regarding the utility of Benefit-Cost analysis in waterfront use decisions. It was concluded that the ratios for alternatives may shift substantially with changes in the context or viewpoint, with important implications for the distribution of benefits and costs amongst individuals, groups, and regions. Changes in timing also seriously affect relative ratings; it was found that the technique was not well-suited to long-range planning problems because of its orientation to specific projects. Finally, it was observed that the difficult type of allocation problem posed in this paper could create numerous intangible benefits and costs which, though considered to be of substantial importance, could not be integrated into the benefit-cost ratio in a useful way. Thus fundamental problems not encompassed by Benefit-Cost analysis must be solved before the ratios become useful for allocation purposes. It was concluded that the hypothesis was invalid. Instead, a comprehensive waterfront planning framework is suggested in which the role of Benefit-Cost analysis is seen to lie in investigating the welfare distribution consequences of alternative development proposals, in the efficiency of various scales of development of a facility or site, or in determining the best of the suitable alternative sites for a particular waterfront use. In this view Benefit-Cost analysis is thus accorded a more limited but still useful role.

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