Syllabus
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This course provides basic principles and methods to evaluate environment and resource. Many public or private resource projects require rigorous evaluation analysis to verify their economic validity. Starting from the conventional Net Present Value method, the course covers various benefit-cost analysis methods which are widely used in evaluating resources including energy resources, and environmental resources. Partial list for covered evaluation methods includes NPV, BC ratio, real option analysis, contingent valuation method, hedonic price method and travel cost method.
1. Course objective and overview
This course provides basic principles and methods to evaluate environment and resource. Many public or private resource projects require rigorous evaluation analysis to verify their economic validity. Starting from the conventional Net Present Value method, the course covers various benefit-cost analysis methods which are widely used in evaluating resources including energy resources, and environmental resources. Partial list for covered evaluation methods includes NPV, BC ratio, real option analysis, contingent valuation method, hedonic price method and travel cost method.
2. Textbook and lecture materials
(1) Cost Benefit Analysis: Concepts and Practice (3rd Edition), A. Boardman, D. Greenberg, A. Vining, and D. Weimer, Pearson Education, 2006.
(2) Project Valuation using Real Options, P. Kodukula and C. Papudesu, J. Ross Publishing, Inc. 2006.
(3) Natural Resource and Environmental Economics, R. Perman et al., Pearson Education Limited, 2003.
(4) Additional lecture notes is provided (written in Korean)
3. Prerequisite courses
Students are strongly recommended to take Microeconomics (mandatory) and Mathematical Economics (optional) before this course.
4. Evaluation
Midterm (30%), Final exam (40%), Team project (20%), Participation (10%)
; one midterm and final exam will count 30% and 40%, respectively. Team project will be required to evaluate hypothetical energy or environment development and it will count 20% in determining the course grade.
4. Course outline
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week |
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Period |
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content |
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1 |
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08.31 - 09.06 |
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Introduction |
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2 |
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09.07 - 09.13 |
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Public economics and Benefit-Cost analysis |
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3 |
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09.14 - 09.20 |
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Benefit-Cost analysis: NPV, BC ratio and IRR |
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4 |
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09.21 - 09.27 |
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Issue of discount rate and WACC |
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5 |
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09.28 - 10.04 |
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Case study: renewable energy project |
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6 |
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10.05 - 10.11 |
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Benefit-Cost analysis: uncertainty and irreversibility |
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7 |
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10.12 - 10.18 |
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Real option valuation methods |
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8 |
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10.19 - 10.25 |
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Excel works and midterm exam |
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9 |
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10.26 - 11.01 |
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Welfare analysis basic: CV and EV |
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10 |
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11.02 - 11.08 |
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Evaluation of non-market goods: CVM theory |
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11 |
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11.09 - 11.15 |
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Evaluation of non-market goods: CVM controversial issues |
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12 |
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11.16 - 11.22 |
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Evaluation of non-market goods: CVM case study |
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13 |
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11.23 - 11.29 |
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Evaluation of non-market goods: hedonic price method |
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14 |
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11.30 - 12.06 |
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Evaluation of non-market goods: travel cost method |
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15 |
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12.07 - 12.13 |
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Supplementary classes |
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16 |
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12.14 - 12.20 |
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Final exam |
