ABSTRACT
This case study, based on an Asian Development Bank project appraisal report and on reports of a similar project by Fleming (1983) (also found in Hufschmidt et al., 1983), is a description of the benefit valuation for a benefit-cost analysis of a management programme for two watersheds in Nepal. It is an example of the use of change-in-productivity techniques in which actual market prices are used as a measure for valuing the benefits of environmental improvements. In this example, physical changes in production brought about by the project are valued using market or, where appropriate, shadow prices for inputs and for outputs. The productivity effects of both introducing the project and of not doing so (with- and without-project analysis) are evaluated. Both on-site and off-site effects are included in the analysis.
