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I'm trying to figure out the appropriate discount rate and methodology that governments should use when doing cost-benefit analysis of big expenditure projects

I'm trying to figure out the appropriate discount rate and methodology that governments should use when doing cost-benefit analysis of big expenditure projects (e.g. infrastructure). It would seem that economists have been arguing about this for many decades now with no end in sight. There are some interesting value-judgements that have to be made here (e.g. do we value the consumption of future generations more/less than present consumption?), so I suspect there will never be an objective answer to this question.

texasbigdata 7y ago
What do infrastructure groups underwrite to? Should be a decent starting point. Theres advisory groups that do only infrastructure projects for public private partnerships. Might be a helpful start.
mojomark 7y ago
Interesting. For my data mining class I took NYC Open data - merging temporal Crime Data and Capital Expenditure data by geographic district/precinct, to see if there was evidence that spending money in a region had a positive impact on crime reduction. Then to see if I could use that model to see if I could predict how much crime would be reduced given a specified funding injection into the region. We assumed there was some lag (e.g. 6 mos. or 1 year) between funded project completion and community impact (reduced crime). The model was only a little over 70% accurate, but the data was sloppy because we had to get creative mapping precincts to districts since their boundaries don't overlap exactly. However, I think this could be significantly improved since crime data is geo-tagged, so you can get much more specific about where crimes occur with respect to funded projects. I think that model can be made to help inform where funding could be most beneficial from a social perspective. I realize there are other factors in infrastructure investments than crime - I was focussed on community improvement projects (e.g. blight removal, green space development, school construction/repair, etc.)

texasbigdata 7y ago

What do infrastructure groups underwrite to? Should be a decent starting point. Theres advisory groups that do only infrastructure projects for public private partnerships. Might be a helpful start.

mojomark 7y ago

Interesting. For my data mining class I took NYC Open data - merging temporal Crime Data and Capital Expenditure data by geographic district/precinct, to see if there was evidence that spending money in a region had a positive impact on crime reduction. Then to see if I could use that model to see if I could predict how much crime would be reduced given a specified funding injection into the region. We assumed there was some lag (e.g. 6 mos. or 1 year) between funded project completion and community impact (reduced crime). The model was only a little over 70% accurate, but the data was sloppy because we had to get creative mapping precincts to districts since their boundaries don't overlap exactly. However, I think this could be significantly improved since crime data is geo-tagged, so you can get much more specific about where crimes occur with respect to funded projects. I think that model can be made to help inform where funding could be most beneficial from a social perspective. I realize there are other factors in infrastructure investments than crime - I was focussed on community improvement projects (e.g. blight removal, green space development, school construction/repair, etc.)