the economist’s role
DESCRIPTION
THE ECONOMIST’S ROLE. Ken Claseman Senior Policy Advisor for Economics Office of Water Project Review HQUSACE [email protected]. OBJECTIVES THE STUDENT WILL KNOW:. WHAT ECONOMISTS DO WHAT THEY NEED TO PERFORM THEIR FUNCTIONS HOW THEY SHOULD PERFORM THEIR FUNCTIONS. - PowerPoint PPT PresentationTRANSCRIPT
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THE ECONOMIST’S ROLE
Ken ClasemanSenior Policy Advisor for Economics
Office of Water Project ReviewHQUSACE
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OBJECTIVESTHE STUDENT WILL KNOW:
• WHAT ECONOMISTS DO
• WHAT THEY NEED TO PERFORM THEIR FUNCTIONS
• HOW THEY SHOULD PERFORM THEIR FUNCTIONS
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WHAT ECONOMISTS DO
• INFORM DECISIONMAKING
• COMMUNICATE VALUE
• PARTICIPATE ON TEAMS
• REPRESENT THE AGENCY
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• Demand/Supply• Willingness-to-Pay• Scarcity• Opportunity Costs• Decisions at the Margin
THE ECONOMIST’S WORLD
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ECONOMICS IN THE USACE• Determines project justification• Helps identify the best Federal Investment• Consistent with economic theory• Integrated with the planning process• Guidance is highly developed
– Principles and Guidelines– ER 1105-2-100– Economic Guidance Memorandums
• Administration Policies affect the scope of Economic Analyses and Formulation
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SPECIFIC ACTIVITIES• Inventories using sampling / surveys• Identify and Quantify Economic Variables• Forecasts Of Future Conditions• Economic Analysis of Alternatives
– NED Benefits– Develop Economic Costs– Estimate B/C Ratios & Net Benefits– Cost Effectiveness/Incremental Cost Analyses– Trade-off Analysis– RED and OSE
• Empirical Evidence is Essential
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SO THE ECONOMIST MUST BE AN...
• Appraiser• Survey Specialist• Data Processor• Statistician• Financial Analyst• Communicator
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BUT CAN ECONOMISTS DO IT ALONE?
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ECONOMISTS REQUIRE INPUTS AND INTERACTION
• LAND USE PLANS• PROBABILITIES• DISCHARGE• STAGES• TRAFFIC FORECASTS• CHANNEL DIMENSIONS • COSTS• RESTORATION OUTPUT
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WHERE DO WE GET THE INFO?• Other Team Members• Other Governmental
Agencies• MSCs - HQUSACE – IWR• Communities of Practice• Centers of Expertise• Outside Experts• Surveys and Databases
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THE STUDY TEAM
– TODAY’S COMPLEXITIES REQUIRE TEAM SOLUTIONS.
– ALL OF US ARE SMARTER THAN ANY ONE OF US.
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HOW SHOULD WE DO IT?
• Follow the Guidance
• Time and Budget Constraints
• Objectivity / Avoiding Bias
• Documentation
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6 STEP PLANNING PROCESSStep 1 - Specify Problems and
OpportunitiesStep 2 - Inventory and Forecast
ConditionsStep 3 - Formulate Alternative PlansStep 4 - Evaluate Effects of
Alternative PlansStep 5 - Compare Alternative PlansStep 6 - Select Recommended Plan
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STEP 1: CONCEPTS• Problems, Opportunities
and Constraints– Economists actively
participate in defining problems, opportunities and constraints.
• Goals and Objectives– Economists use goals and
objectives for evaluation.
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STEP 2: INVENTORYAND FORECAST
• Data collection– Related to problems,
opportunities and objectives• Define historic and existing
conditions• Forecast
– Existing Condition– Future Without Project Condition– Future With Project Conditions
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STEP 3: ALTERNATIVE PLANS
• Management Measures• Alternatives• Programs
Economists must participate in formulation process, understand performance of measures to estimate economic impacts.
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STEP 4: EVALUATION• Quantify and Describe Effects & Impacts
– National Economic– Environmental, including ecological and cultural – Regional Economic– Social
• Four Evaluation Criteria: Efficiency, Effectiveness, Completeness, Acceptability
• Other Criteria – RED/OSE• Future With Project Conditions
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STEP 5: COMPARISON
• Compare all viable plans• Describe differences
– Contributions to objectives– P&G Evaluation Criteria– Other criteria of importance
• Describe trade-offs– Systematic trade-off analysis
might be required.
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STEP 6: SELECTION• No Action• NED Plan• NER Plan• Locally Preferred Plan• Combined NED/NER Plan Economists provide primary input for decision making
IS IT WORTH IT ?IS IT WORTH IT ?
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OTHER THINGS ECONOMISTS DO• Input to PMPs• Financial Analysis• Life Cycle Cost Studies• Economic Updates• Economic Analysis for:
– DMMPs– Dam Safety– Military Projects
• Budgetary Support
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KEY TAKE AWAYS• Economists communicate value.• Economists help identify best Federal
investment.• Empirical evidence is essential.• Economists are important members of Project
Delivery Teams.• Economists play a significant role throughout
the planning process.
IS IT WORTH IT???