eib university research sponsorship programme cost benefit analysis in the research, development and...
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EIB UNIVERSITY RESEARCH SPONSORSHIP PROGRAMME
COST BENEFIT ANALYSIS IN THE RESEARCH, DEVELOPMENT AND INNOVATION SECTOR
UNIVERSITY OF MILAN - DEPARTMENT OF ECONOMICS, MANAGEMENT AND QUANTITATIVE METHODSUNIVERSITY OF MILAN - DEPARTMENT OF PHYSICS
CSIL - CENTRE FOR INDUSTRIAL STUDIES
Luxembourg, 23 April 2015
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• Developing a CBA theoretical model for evaluating research infrastructure (RI)
• Testing the CBA model on two case studies• Enabling funding agencies to assess the potential
future net social benefits generated by a RI
GOALS OF THE STUDY
2SSC (abandoned) ISS International Space Station LHC Large Hadron collider
The E(NPV) of research infrastructures over the time horizon 𝒯is defined as the expected difference between benefits and costs valued at shadow prices and discounted at the social discount rate . It can be decomposed in two parts: the 𝑟expected net present value of use-benefits and costs NPV and 𝑢the expected (non-use) social value of discovery . We drop 𝐵𝑛the expectation operator, but all variables are to be considered as stochastic.
THE MODEL
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= Knowledge creation+ Technological spillovers+ Human capital formation+ Cultural effects+ Services provided by applied RI
= Investments+ Operational costs
= Existence value+ Quasi option value
𝑁𝑃𝑉 𝑅𝐼=𝑁𝑃𝑉𝑢+𝐵𝑛=(𝑃𝑉 𝐵𝑢−𝑃𝑉 𝐶𝑢 )+𝐵𝑛
BENEFITS
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Knowledge
output (S)Technological
externalities(T)Cultural
effects (C)
Human capital
formation(H)The present value of use-benefits and costs NPV 𝑢 is the sum of the economic value of:
The non-use benefits captures two types of benefits related to the social value of 𝑩𝒏discovery:
the quasi-option value & the existence value
Services provided by applied RI (A)
Pure research infrastructure
Applied research infrastructure
TWO PILOT CASE STUDIES
CERN Large Hadron Collider (LHC), Geneve
National Hadrotherapy Center for Cancer Treatment (CNAO) in Pavia, Italy
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00.10.20.30.40.50.60.70.80.9
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-863,076 847,853 2,558,782 4,269,712 5,980,641 7,691,570
(thousand Euro)
Cumulative Distribution Function
Cumulated probability Mean Median Std. Dev. from mean
(thousand Euro)
# Pathology Clinical alternative Type of benefit
Marginal percentage of
patients who fully recover compared
to the counterfactual
situation identified in the third column
(for benefit of TYPE 1)
Number of life years gained
thanks to hadrontherapy
with respect to the counterfactual
situation identified in column 2(for
benefit of TYPE 2)
1 Proton radiation therapy for chordomas and chondrosarcomas of the skull base
No alternative TYPE 1 73% -
2 Proton therapy of spine chordoma and chondrosarcoma
No alternative TYPE 1 73% -
3 Proton therapy of intracranial meningioma
No alternative TYPE 1 33% -
4 Proton therapy of brain tumors No alterative* TYPE 3 - -
5 Proton therapy of recurrent cervico-cephalic area tumors
No alterative* TYPE 3 - -
6 Proton boost for locally advanced cervico-cephalic area tumors
No alternative for advanced tumours
TYPE 2 15% 5
7 Proton therapy of glioblastoma No alterative TYPE 3 100% 1
8 Proton re-irradiation of recurrent spine chordoma and chondrosarcoma
No alterative TYPE 2 43% 3
9 Carbon ion therapy of adenoid cystic carcinoma of salivary glands
Surgery + photon therapy
TYPE 1 45% -
10 Carbon ion re-irradiation of recurrent pleomorphic adenomas
Surgey TYPE 1 21% -
• 1020 interviews at students (Milan, Paris, Exeter, a Coruña)
• 280 interviews at PhD students and Post-docs at Cern
• More than 1oo interviews with scientists, managers, experts, firms
• More than 15 researchers involved in the project
ACTIVITIES IN NUMBERS
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• 4 published working papers
• 4 forthcoming working papers
• An operational manual
• XIII Milan European Economy Workshop «The cost-benefit analysis of research infrastructures», 12-13 June 2014
• Presentation of the model at Seventh Annual Conference and Meeting of the Society for Benefit-Cost Analysis, “Advancing the Policy Frontier” - March 19-20, 2015 - Washington, D.C.
• Call for papers for a special issue on Technology Forecasting and Social Change
• Final event in Brussels hosted by DG Research
OUTCOME AND DISSEMINATION
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DISSEMINATION ACTIVITIES
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DISSEMINATION ACTIVITIES
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RESEARCH RESULTS: FORTHCOMING
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DISSEMINATION ACTIVITIES: FORTHCOMING
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THE USE OF COST-BENEFIT ANALYSIS IN THE EVALUATION OF RESEARCH INFRASTRUCTURES AND MAJOR R&D PROGRAMMES
Presenting the results of the research project Cost-Benefit Analysis in the
Research, Development and Innovation Sector, sponsored by the EIB Institute (University Research Sponsorship Programme -EIBURS)
FINAL EVENT
November 13th 2015DG Research, Brussels
