Table 4.

Guidance related to quantification and valuation of impacts, decision rules, sensitivity analyses and other considerations

Document title	Costs and benefits	Valuation of non-market benefits	Key decision rules	Sensitivity/uncertainty analyses	Other considerations
Cost–benefit analysis guidance note (2020) [33]	Productivity identified as first-round impacts Exclude: second-round impacts (e.g. land use)	Quantify if able, otherwise qualitative assessment RP preferred, SP, benefit transfer VSL (A$ 2021) = 5.1 M VSLY (A$ 2021) = $222,000 [74]	NPV	Worst/best-case, one-way, Monte Carlo methods	Distributional impacts
Handbook of Cost–Benefit Analysis January (2006) [45]	Productivity identified as a benefit of health interventions Exclude: WEB including employment multipliers, second-round impacts	Quantify if able. Non quantified impacts are called “intangibles” and should be described qualitatively RP, SP, benefit transfer	NPV. Cautious use of BCR which can be biased towards small projects	Worst case, one-way, Monte Carlo methods for complex cases	Distributional impacts
Assessment framework: for initiatives and projects to be included in the Infrastructure Priority List (2018) [48]	Productivity identified as a benefit Categorized into impacts on users and producers and external impacts to broader community Where appropriate include: WEB, second-round land-use benefits	Quantify if able, otherwise qualitative assessment RP, SP, replacement cost method, benefit transfer	NPV, BCR Others: NPV per dollar of capital investment, first year rate of return	Time horizon: 30 and 50 years Include/exclude WEB Best-case scenario: −20% costs and + 20% benefits/upside adjustment for 4–5 key variables Worst-case scenario: + 20% costs and − 20% benefits/downside adjustment for 4–5 key variables Monte Carlo—probability distribution of project costs with 50% and 90% probability that the cost won’t be exceeded	WEB, land-use impacts, productivity, urban regeneration, local equity and distributional impacts
Guidelines for preparing a submission to the Pharmaceutical Benefits Advisory Committee (2016) [31]	Include: all health sector impacts Exclude: non-health sector costs, productivity impacts in primary analysis	Recommends population preference weights for health state utility calculation	ICER; $ per QALY gained	Requires extensive one-way, multi-way, Monte Carlo methods	Equity of access to medicine
NSW Government Guide to Cost–Benefit Analysis (2017) [4]	Productivity is a direct impact on individuals and an indirect impact on employers Include: first-round impacts (direct and indirect) Exclude: second-round impacts (e.g. WEB, land value uplift)	Quantify if able, otherwise qualitative assessment Valuation based on individuals/firms that experience outcomes RP preferred, SP, benefit transfer	NPV, BCR. BCR used when there are differences in ranking between NPV and BCR	All key values and assumptions using one-way, scenario, best/worst-case, Monte Carlo methods WEB and land uplift can be included in best-case scenario	Distributional impacts
Transport for NSW Cost–Benefit Analysis Guide (2019) [8]	Impacts on the user, social, government, dis-benefits, other impacts (WEB, land value uplift, option value and nonuse value, improvements to place) Exclude WEB in primary analysis, take care when using land uplift values	Quantify if able, otherwise qualitative assessment RP, SP VSL (A$ 2019) = 7.6 M [70]	NPV, BCR. BCR used when differences in ranking between NPV and BCR	Deterministic and probabilistic (Monte Carlo) methods	Distributional impacts
Guidelines for using cost–benefit analysis to assess coastal management options (2018) [7]	Include: Direct and indirect impacts and externalities (use and nonuse values) Exclude: second-round impacts	Quantify if able, otherwise qualitative assessment RP, SP, benefit transfer	NPV, BCR. No advice on the more appropriate option when ranking differs. Reports decision-making should be based on both criteria	All key values and assumptions tested using Monte Carlo methods	Distributional impacts across public and private sector stakeholders Second-round impacts to local businesses, employment, income and social cohesiveness impacts
Guide to Cost–Benefit Analysis of Health Capital Projects (2018) [37]	Productivity direct impact on individuals and indirect impact on employers Include: first-round impacts (direct and indirect) Exclude: second-round impacts (e.g. WEB, land value uplift)	Quantify if able, otherwise qualitative assessment RP preferred, SP, benefit transfer Methods for valuation of health benefits by service stream provided in the CBA toolkit [15]. DALYs valued using VSLY VSL (A$ 2018/19) = $4.5 M VSLY (A$ 2018/19) = $195,000	NPV, BCR. BCR used when differences in ranking between NPV and BCR	All key values and assumptions tested using one-way, scenario, best/worst-case, Monte Carlo methods	Distributional impacts
Commissioning Economic Evaluations: A Guide (2017) [49]	Impacts measured and quantified depend on the perspective of the evaluation. Include: direct (provider costs), indirect (patient, family, including absenteeism), cost offsets (health sector cost savings), non-healthcare cost offsets (cost savings to other sectors)	Health valued using QALY and DALY. Reports there are equity concerns for using WTP values to monetize health benefits, as WTP is associated with ability to pay	ICER Reports PBAC threshold based on previous decisions (A$ 37,000–69,000 per life-year gained)	One-way, scenario, Monte Carlo methods	Distributional impacts

A$ Australian dollars, BCR benefit–cost ratio, CBA cost–benefit analysis, DALY disability-adjusted life-year, ICER incremental cost-effectiveness ratio, NPV net present value, NSW New South Wales, PBAC Pharmaceutical Benefits Advisory Committee, QALY quality-adjusted life-year, RP revealed preference, SP stated preference, VSL value of a statistical life, VSLY value of a statistical life-year, WEB wider economic benefits, WTP willingness to pay