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COST‐EFFECTIVENESS OF CONSERVATION PROGRAMS: THE HOOD RIVER EXPERIMENT
Author(s) -
KHAWAJA MUHANNAD,
POTIOWSKY THOMAS R,
PEACH H. GIL
Publication year - 1990
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1990.tb00652.x
Subject(s) - energy conservation , cost–benefit analysis , environmental economics , benefit analysis , economic analysis , economics , computer science , business , risk analysis (engineering) , environmental resource management , engineering , agricultural economics , ecology , electrical engineering , biology
Economic cost‐effectiveness analysis is a systematic approach to assessing benefits and costs associated with different actions. This analysis, as applied to energy conservation programs, is complicated greatly by the existence of intangible benefits and costs. A further complication occurs when the input values are uncertain. Such inputs include the useful lives of measures installed, the appropriate discount rate, and the expected levels of savings. This paper shows how one can incorporate input uncertainty and some intangibles into the cost‐effectiveness analysis calculations. The Hood River Conservation Experiment provides the framework for analyzing these issues and serves as a pilot program for future conservation implementation.