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Cost benefit analysis in urban development—A case study: Swanley

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References

  1. See, for example: Marion Clawson,Methods of Measuring the Demand for and Value of Outdoor Recreation [Reprint No. 10] Washington, D.C., Resources for the Future, 1959; Otto Eckstein, “Benefit-Cost Analysis and Regional Development,” in Walter Isard and John Cumberland,Regional Economic Planning: Techniques of Analysis, Paris, European Productivity Agency-O.E.E.C., 1961; C.D. Foster and M.E. Beesley, “Estimating the Social Benefit of Constructing an Underground Railway in London,”Journal of the Royal Statistical Society, Series A (General) vol. 126, 1963, pp. 46–93; Charles J. Hitch and Roland N. McKean,The Economics of Defence in the Nuclear Age, London, Oxford University Press, 1960; Roland N. McKean,Efficiency in Government Through Systems Analysis, London, Chapman & Hall, 1958; Alan T. Peacock and D.J. Robertson eds.,Public Expenditure: Policy and Appraisal, Edinburgh, Oliver and Boyd, 1964; Howard G. Schaller, ed.Public Expenditure: Decisions in the Urban Community, Resources for the Future, Washington, D.C., 1963; John Vaizey,The Economics of Education, London, Faber and Faber, 1962; Burton Weisbrod,The Economics of Public Health: Measuring the Economic Impact of Diseases, Philadelphia, University of Pennsylvania Press, 1961; and Gerold P. Wibberley,Agriculture and Urban Growth, London, Michael Joseph, 1959.

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  2. Nathaniel Lichfield,Economics of Planned Development, London, Estates Gazette, 1956, part IV; “Value for Money in Town Planning,”Journal of the Royal Institution of Chartered Surveyors, 1959; “Cost-Benefit Analysis in City Planning,”Journal of the American Institute of Planners, 1960;Cost-Benefit Analysis in Urban Redevelopment, [Research Report 20], Real Estate Research Program, Institute of Business and Economic Research, Berkeley, University of California, 1962; and “Cost-Benefit Analysis in Plan Evaluation,”The Town Planning Review, 1963; Also, see: D.H. Crompton, “Cost-Benefit Analysis and Accessibility and Environment,” inTraffic in Towns, Reports of the Steering Group and Working Group appointed by the Minister of Transport, London, H.M.S.O., 1963, Appedix 2; “Planning and the Land Market” inContemporary Problems of Land Ownership, University of Cambridge, Dept. of Land Economy, 1964; “Problems of Social Choice,”Traffic and Transport, December 1964; “Spatial Externalities in Urban Public Expenditure: A Case Study” (to be published, 1965).

  3. Lichfield,Cost-Benefit Analysis in Urban Redevelopment, op. cit.; Cost-Benefit Analysis in Urban Redevelopment, [Research Report 20], Real Estate Research Program, Institute of Business and Economic Research, Berkeley, University of California, 1962]; pp. 20ff.

  4. Any variation from these assumptions would affect not the total financial costs and returns but their incidence. The implications of incidence could then be considered following the basic cost-benefit analysis.

  5. Land acquisition costs were based on the compulsory purchase compensation code: roughly, market value for real estate interests plus compensation for disturbance to trade, etc. Both land and construction costs include an allowance for professional fees and interest on capital during the development period.

  6. The annual cost in the public sector is taken at the annual annuity to repay the loan (interest plus redemption) over 60 years at 6%. The 8-1/2% in the private sector allows a profit and amortization element over the borrowing rate. Theoretical questions arise in the selection of a rate of interest; these are not discussed here.

  7. The compensation paid by the acquiring authority includes an element for disturbance to occupiers; see footnote 5, above. This element is considered in item 4.1. Observe in Table 2 that taking is at market value as is the compensation. Thus, landowners' assets do not change. This assertion will take some swallowing, for each redevelopment project is fought bitterly by very many owners, despite the promise of compensation at market values. But the objections stem from all kinds of reasons-dislike of official action, hope for diversion into other property, difficulty in selling that follows planning proposals, etc. These are certainly costs, but they are assumed here to be compensated for in the acquisition price.

  8. Ministry of Works and Planning,Expert Committee on Compensation and Betterment, Final Report London, H.M.S.O., 1942, pp. 14–16.

  9. Here is a case where measurement could be made, but it is not necessary to do so to assess the Table 2 position. This is in contrast to item 3.3. where measurement was difficult but necessary simply in order to classify the Balance Sheet.

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  1. University College, London

    Nathaniel Lichfield

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  1. Nathaniel Lichfield
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Much of the data in this study has been supplied by Mr. B.F. Kirby, Engineer and Surveyor to the Dartford Rural District Council, and Messrs. Keeble and Trevena, the Council's Planning Consultants. Their contribution is warmly appreciated.

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Lichfield, N. Cost benefit analysis in urban development—A case study: Swanley. Papers of the Regional Science Association 16, 129–153 (1966). https://doi.org/10.1007/BF01888943

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