Framework for economic cost-benefit analysis of rural livelihoods projects
Student name: Ms Tara Brara
Guide: Prof Badal Mukhopadhyay
Year of completion: 2011
Host Organisation: The Energy and Resources Institute (TERI)
Supervisor (Host Organisation): Mr Anirban Ganguly
Abstract: The theory and practice of cost-benefit analysis has been explored for decades. The
application of such analyses to rural livelihoods projects allows a simple decision rule
to determine whether a project should be undertaken or not. This study reviews the
theoretical underpinnings of economic CBA of rural livelihoods projects and develops
a framework for such an analysis. The study develops a schematic representation of
project processes, based on which project costs are classified into three categories:
DPC, administrative, and developmental costs. An activity linkage diagram is
developed, based on which project benefits are classified into five categories: Crop
Benefits, Livestock Benefits, Benefits from Income Generating Activities, Migration
Support Benefits, and Benefits from Drudgery Reduction. The study develops
templates for measuring benefits from each of these categories. Templates are also
developed for conducting an activity-wise CBA, and finally, for a project CBA at the
sample village level.
