Benefit-Cost Analysis for restoration of rivers (Research Paper Sample)

Benefit-Cost Analysis for restoration of rivers Executive overview: Public projects are usually big and require a complete report about the cost-benefit analysis. This report is about the river restoration. This research study focuses on the evaluation of 8 rivers in the Great Lakes region of the United States. This report evaluates the nonmarket benefits and costs, especially those related to natural resource projects and environmental impacts. The focus of the study is about the Muskingum river which flows 75. This river flows in the economically depressed region of Southeastern Ohio. The policymakers were trying to use this river for regional development. The river is about 75 miles now and it already has 10 locks in the form of dams that were constructed between 1837 to 1841 to facilitate the people in terms of transport and agriculture. The main theme of this project is to repair and improve the historic dams and locks, improve the bike trail, and improvement in the household septic system, and establish municipal zoning. In this project, the method applied for caused analysis is the market-based opportunity cost concept. It isn't easy to calculate the benefits of the corridor improvements. It is suggested that benefits can be calculated with the survey method. And the benefit is calculated through the previous studies and the benefit captured in the past. In this study, it is ensured to estimate with the lower bond of net benefits and avoid overstating the economic benefits. In this project cost and benefit are expressed in 1999 value with a 10% discount rate. Current value of benefits $(000) Current value of costs $(000) Net present value $(000) Benefit/cost Ratio Zoning 774 144 630 5.40 Septic (cost sharing) 6,692 4,641 2,051 1.45 Bike Trail 13,311 2,050 11,261 6.50 Lock & Dam 38,290 18,470 19,816 2.07 Table 1: Net Present value with a 10% discount rate Project costs The project of river restoration has consisted of various projects. These projects have different costs and benefits. Cost estimation was difficult but possible in the various chunks. The cost of zoning and improving septic systems were taken from the registered contractors interested in bidding. The cost estimation was based on the average cost of the various contractors. It was a long project so the cost can be divided into several years. The improvement in zoning and the septic system also enhances the price of the relevant households. The hedonic pricing method is used for the estimation. Current value of costs $(000) Zoning 144 Septic (cost sharing) 4,641 Bike Trail 2,050 Lock & Dam 18,470 Total 25305 Table 2: Cost estimation of the several projects in the restoration of river This project consists of a variety of projects and has different values of benefits. It was the reason the cost of these projects was calculated separately. The cost of the project was taken from experienced contractors who were previously involved in similar types of projects. Project Benefits: The Restoration of the river consisted of various projects. The zoning improvement causes an increase in tax revenue. The improvement in the septic system also improves the house prices in that area. This improvement in zoning and septic systems also improves the functions of school districts. In table 3 the detail of tax mileage and the tax collection due to the improvement in the septic system is explained. City Tax Millage ($) Coefficient Estimate Number of houses in the area Tax revenue increase Zoning Zanesville 44.23 269 485 5782 Marietta 43.17 269 464 5390 Septic System Muskingum 44.23 67 1002 2975 Washington 43.17 67 726 2100 Table 3: Property tax increased due to the corridor improvement. Table 3 shows the property tax increase due to the corridor improvement. Property test tax increase is calculated into phases one is from the zoning and the other is septic system improvement. It is estimated that the tax increase in the zoning is about 44 USD per household. It is estimated that there are 485 houses from where the government collects an increased tax. Similarly, the increase in the text due to the improvement in the septic system is also mentioned in Table 3 which is almost 44 USD per household. It is the calculation of only one benefit from the improvement in the zoning and septic system. Standing: It is observed that the development in that area due to the improvement in the dam will attract other people to live there. Not only the improvement in the population but also the average tax amount will increase. It is estimated that a minimum 10% increase in the household tax in that area. This will help to increase the overall revenue of the local government. City Tax Millage ($) Coefficient Estimate Number of houses in the area Tax revenue increase Zoning Muskingum 24.60 269 1487 9844 Washington 26.22 269 1190 8396 Septic System Muskingum 24.60 67 1002 1653 Washington 26.23 67 726 1276 Table 4: Annual school district tax revenues generated by zoning and septic system. Table 4 shows the increase in the annual revenue of school districts with the improvement of zoning and septic systems. It is observed that the 24.60 tax has increased in Muskingum and similarly the tax increase is 26.22 in Washington. It will be a continuous revenue for these States and it will ultimately increase the financial activities in different areas due to the development. Infrastructure and Water Quality Results Earlier estimated by the US Army engineers that it is a large protected increase dumb Mustkingum River corridor recreation. It is a large future investment and gives long-term benefits. It is observed that exact estimation is very difficult in this case about the income and recreation activities improvements. The results of the survey show that the cost of repairing, maintaining, and operating the locks and dams is smaller than the benefits. The estimated cost was about 6 million. The benefit estimated with the survey describes that the present value of the benefit was more than 11 million and the benefit-cost ratio is 6.49. Improvement in the Transportation and Recreation activities. Another benefit of this improvement is the quality of the school system. High School graduation read will increase in the area. This corridor improvement to reach the school's urban centers in no time. Another benefit of the improvement in the river is the water quality. Water quality improves the health condition in the area and also has a positive impact on non-form residential areas. Freshwater is the primary necessity of life so it will increase the...