Non-traded Outputs and External Effects

Abstract

This chapter surveys the key issues relating to several project effects which are generally difficult to incorporate within an analysis. Initially there is a discussion of the procedures for valuing outputs from projects in non-traded sectors. As pointed out earlier, the treatment of their benefits is less straightforward than where traded output is involved. The procedures for estimating non-traded benefits utilizing a demand curve for the good concerned are discussed, and examples of transport and irrigation projects are considered. The second part of the chapter focuses on external effects and the related concept of linkages.