nep-ppm New Economics Papers
on Project, Program and Portfolio Management
Issue of 2010‒08‒14
four papers chosen by
Arvi Kuura
Parnu College - Tartu University

  1. The Economics of Infrastructure Investment: Beyond Simple Cost Benefit Analysis By Arthur Grimes;
  2. Cognitive styles and teamwork: examining the impact of team composition on team processes and outcomes By Vanderheyden, K.; Lommelen, B.; Cools, E.
  3. Assessing Socioeconomic Impacts of Transport Infrastructure Projects in the Greater Mekong Subregion By Stone, Susan; Strutt, Anna; Hertel, Thomas
  4. Optimal Provision and Finance of Ecosystem Services: the Case of Watershed Conservation and Groundwater Management By James Roumasset; Christopher Wada

  1. By: Arthur Grimes (Motu Economic and Public Policy Research);
    Abstract: This non-technical ‘think-piece’ examines aspects of infrastructure project evaluation, concentrating on circumstances that may render a standard cost benefit analysis (CBA) inappropriate. It is designed to make infrastructure investors and planners think deeply about their assumptions and to broaden the range of issues that are taken into account. Issues considered include: the role of CBA; network effects (increasing returns to scale) and the endogeneity of resources within an economy; the valuation of productive versus consumptive benefits; the value of traded versus non-traded sector production; the role and choice of the discount rate; and the importance of considering option values when making infrastructure investment and disinvestment decisions.
    Keywords: Infrastructure, Cost Benefit Analysis, Evaluation
    JEL: H54
    Date: 2010–08
  2. By: Vanderheyden, K.; Lommelen, B.; Cools, E. (Vlerick Leuven Gent Management School)
    Abstract: The question whether diversity is advantageous or disadvantageous for teams has yet to be resolved. The present research investigates the effect of cognitive diversity on team processes and outcomes through two successive studies with experimental team tasks involving 57 teams of management students (N = 288). Team composition in each of the studies was manipulated on the basis of students’ cognitive profiles, as measured with the Cognitive Style Indicator (CoSI), leading to homogeneously composed teams, semi-homogeneous teams, and heterogeneous teams. Contrary to previous research, the time needed to complete the task was longer in homogeneous teams than in semi-homogeneous and heterogeneous teams, and team composition had no effect on performance or satisfaction. Apart from heterogeneous teams showing to be more task oriented, there seemed to be no relationship between team composition and team process variables, including perceived relational orientation, and groupthink. However, in the different homogeneous teams, the perception of individuals with different cognitive styles did vary on these dimensions. Cognitive styles were also significantly related to preferences for certain task types. The relevance of these findings is discussed in the light of the recruitment and staffing decisions and pathways for future research are indicated.
    Keywords: team diversity, cognitive styles, team effectiveness, team satisfaction, task orientation, relational orientation
    Date: 2010–07–26
  3. By: Stone, Susan (Asian Development Bank Institute); Strutt, Anna (Asian Development Bank Institute); Hertel, Thomas (Asian Development Bank Institute)
    Abstract: This study attempts to quantify the links between infrastructure investment and poverty reduction using a multi-region general equilibrium model, supplemented with household survey data for the Greater Mekong Subregion (GMS). Infrastructure investment is an important step in economic development, with improvements in transportation infrastructure boosting economic opportunities throughout the region, for example by significantly reducing travel times and costs. In this study, we concentrate on quantifying the effects of some of the key linkages between upgraded infrastructure, economic growth, and poverty reduction. We model the impact of both reducing transport costs and improving trade facilitation in the GMS. Our findings suggest strong gains to the GMS countries as a result of infrastructure development and trade facilitation with national poverty reduced throughout the region. However, the impact on various segments of these populations differs, depending in part on factor returns.
    Keywords: greater mekong subregion; poverty reduction; infrastructure investment
    JEL: F15 I32 O12
    Date: 2010–08–03
  4. By: James Roumasset (University of Hawaii, Department of Economics; University of Hawaii Econonmic Research Organization); Christopher Wada (University of Hawaii Econonmic Research Organization)
    Abstract: Payments for ecosystem services should be informed by how both the providing-resource and the downstream resource are managed. We develop an integrated model that jointly optimizes conservation investment in a watershed that recharges a downstream aquifer and groundwater extraction from the aquifer. Volumetric user-fees to finance watershed investment induce inefficient water use, inasmuch as conservation projects actually lower the optimal price of groundwater. We propose a lump-sum conservation surcharge that preserves efficient incentives and fully finances conservation investment. Inasmuch as proper watershed management counteracts the negative effects of water scarcity, it also serves as adaptation to climate change. When recharge is declining, the excess burden of non-optimal watershed management increases.
    Keywords: Renewable resources, dynamic optimization, groundwater allocation, watershed conservation, multiple resource stocks
    JEL: Q25 Q28 C61
    Date: 2010–07–30

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.