8. Decision support tools Flashcards
What are decision support tools?
Decision tools are techniques and instruments that can be used to identify, gather, organize and analyze the most important criteria that a decision maker takes into account to make a decision.
Why do we use decision support tools?
We use them to get people together and to think about solving problems in a structured way.
What is a CBA?
Cost-Benefit Analysis: assessing alternative scenarios based on monetary values
What is an MCA?
Multi-Critera Analysis: assessing alternative scenarios based on a number of qualitative or quantitative criteria
Why do CBAs sometimes have a discount rate?
Because they include a temporal dimension.
What does a SCBA show?
SCBA provides an overview of the effects, risks and uncertainties and the resulting costs and benefits for society as a whole.
Name at least 4 of the 8 steps of doing an (S)CBA
- Problem analysis
- Establish baseline
- Define alternatives
- Determine effects and benefits
- Determine costs
- Analyze variants and risks
- Overview of costs and benefits
- Presentation of results
Why do we only count final services in a CBA?
We don’t want to count double.
Name two ways in which one can measure quantitative effects for a CBA.
- Business cases - case-based evidence
- Empirical information - literature estimates on causal relationships
- Dose-reponse functions - health effects of increase in air pollution
- Experiments - flower beds on borders of farmland to increase pollination and productivity
- Valuation of effects: economic valuation methods
- Long term costs and benefits: choosing an appropriate discount rate
What is the rule of thumb for deciding if an investment is economically viable?
When Net Present Value (NPV) is more than 0.
What is a standard discount rate?
3% per year
Name 2 potential problems of including final benefits only in a CBA.
- Assumption of linear relationships; in reality: tipping point leads to hysteresis
- It takes long to return to natural state
- Measuring final benefits only may obscure underlying negative trends in intermediary services
- Decline in biodiversity may not have direct effects now, but existence of tipping point may imply sharp decline in benefits later
- Measuring intermediary services, and getting insight into their roles in production functions of ESS is crushed
Can MCAs have both quantitative and qualitative criteria?
Yes, measurable criteria can be both qualitative or quantitative and do not need to be in monetary terms.
When do you include stakeholders in an MCA?
In each step of the MCA there is potential to include stakeholders.
How does the inclusion of certain stakeholders affect the results of an MCA?
The choice of who to involve, when to involve them and to what extent will impact the results of the MCA
