What Is an Economic Appraisal?

Economic evaluation is the evaluation of the national economic benefits of the project, which refers to the calculation and analysis of the project using economic parameters such as shadow prices, shadow exchange rates, shadow wages, and social discount rates in accordance with the long-term development goals of the national economy and social needs, using cost and benefit analysis methods. It requires the price that the national economy pays for it and its contribution to the national economy.

Economic evaluation

Right!

Economic evaluation as a project

Economic evaluation as a project

(I) Analysis of investment net output value

The main analysis is the investment net output value rate.

(II) Analysis of investment net income

Main analysis

(1) Economic assessment is in

The angle of evaluation is different.

The financial benefit evaluation is to analyze the project from a financial perspective and examine the financial profitability of the project; the national economic evaluation is to analyze the project from a national economic and social perspective and examine the economic rationality of the project.

The goals of the assessment are different.

The financial benefit evaluation takes the enterprise's net profit as the goal; the objective of the economic evaluation is to contribute to social welfare and the country's basic development goals, and to effectively use and reasonably allocate resources.

The meaning and scope of costs and benefits are different.

The financial benefit evaluation is to calculate the cost and benefit of the project based on the financial revenue and expenditure directly incurred by the enterprise; the economic evaluation is to examine the cost and benefit of the project based on the useful resources consumed by the project and the useful products (including services) provided to the society. The financial benefit evaluation only examines the direct costs and direct benefits of the project. In addition to the direct costs and direct benefits of the national economic evaluation, it also examines the indirect costs and indirect benefits caused by the project.

The basis of calculation is different.

The financial benefit evaluation uses the current domestic market price, using the industry benchmark rate of return or the national long-term loan interest rate as the discount rate, and the official interest rate specified by the state; the economic evaluation uses economically reasonable prices (shadow prices) and social discount rates that approximate social values. Or the national benchmark rate of return as the discount rate, and use the country-adjusted exchange rate (shadow exchange rate).

The content and method of assessment are different.

The content and methods of financial benefit assessment are relatively simple and involve a relatively narrow area. An enterprise cost-benefit analysis method is used. The economic assessment has many contents, the methods are more complicated, and the scope is wider. Cost-benefit analysis, cost-benefit analysis and multi-objective comprehensive analysis are required.