Probabilistic evaluations of economic merit of water resource projects

Yeou-Koung Tung*, Jinn Chuang Yang

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

The presence of uncertainties in assessing benefits and costs detracts from deterministic economic evaluation. This paper examines three probabilistic economic evaluation procedures: stochastic dominance, expected gain-confidence limit, and Hurwicz criterion. Their relative performances are evaluated through an example. Furthermore, the paper investigates the effects of (1) distributional assumptions of benefit and cost items, (2) uncertainty in project life, and (3) distribution of net present value on the project selection.

Original languageEnglish
Pages (from-to)203-223
Number of pages21
JournalWater Resources Management
Volume8
Issue number3
DOIs
StatePublished - 1 Sep 1994

Keywords

  • economic analysis
  • probabilistic analysis
  • uncertainty

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