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Economics of Timing Storm Drainage Improvements
Author(s) -
Cochrane Harold C.,
Huszar Paul C.
Publication year - 1984
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/wr020i010p01331
Subject(s) - drainage , storm , inflation (cosmology) , value (mathematics) , environmental science , water resource management , economics , mathematics , meteorology , geography , statistics , theoretical physics , biology , ecology , physics
An important component of optimizing storm drainage improvements is the timing of their implementation. Both the number and the value of structures protected by a drainage project may increase with time, thus increasing the benefits of delaying the project. Delaying the project, however, also may entail costs of greater expected losses and rising construction expenditures. The issue of timing is also confused by inflation. The optimum time to construct a drainage project depends upon the initial value of the structures at risk, the construction costs of the project, and the rates of growth in these two values. Growth rates are properly computed in real terms so as not to be confused with inflation. The optimum time maximizes the difference between the changing present values of the benefits and costs of the project. In general, projects in urbanizing areas may be optimally delayed. Projects in mature, developed areas are not likely candidates for delay.