ABSTRACT
This chapter is valuation of direct effects, which arc the benefits (or costs) to direct users of the project output. This is in contrast to indirect effects, which accrue to people one or more steps removed from the users of the project output. In a market transaction, the analyst accepts the price outcome as a reflection of the owners' rights that were exchanged. In some cases, government projects produce outputs similar to those produced in the private market, although the government may not wish to sell the good. The market analogy method utilizes output price data of substitute products that are comparable to those of the public project. The intermediate good method utilizes the computation of the change in net income. The method has been applied to project outputs that are inputs into another production process. A common application of the cost savings approach is in transportation projects.
