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http://dx.doi.org/10.7851/ksrp.2018.24.3.137

A Cost-Benefit Analysis of Road Construction in International Development Cooperation Project - A Case of KOICA's Lao Cai Happiness Program in Vietnam -  

Lee, Ah-Youn (Department of Agricultural Economics, Chungbuk National University)
Kong, Ki-Seo (Department of Agricultural Economics, Chungbuk National University)
Yoon, Seong-Soo (Department of Agricultural&Rural Engineering, Chungbuk National University)
Song, Yang-Hoon (Department of Agricultural Economics, Chungbuk National University)
Publication Information
Journal of Korean Society of Rural Planning / v.24, no.3, 2018 , pp. 137-144 More about this Journal
Abstract
The purpose of this study is to measure the cost-benefit of a road construction project in Vietnam through international development cooperation, which includes private grants and Official Development Assistance(ODA). In developing countries, it is difficult and costly to use data on markets, the CVM(Contingent Valuation Method) to measure the WTP(Willingness-to-Pay) as the benefits of road construction are used. A total of 232 villagers in 16 villages of Lao Cai Province in Northern Vietnam have been surveyed. It is found that the Benefit-Cost Ratio(B/C) in all 3 models are found to be well over 1.0, ranging from 2.8 to 3.64 with the discount rate of 0.06. These BC ratios imply the road construction project in Lao Cai can be justified. Also, it is found that the shortened travel time is the most relevant factor for WTP among direct benefits and the enhanced academic achievement of the children is the most relevant factor among indirect benefits, due to easier and faster access to schools, which in turn increase the school attendance rate. The result of this study can be used to justify other similar projects in Vietnam, even though the benefits may have to be reassessed in other countries.
Keywords
Road Construction; Vietnam; CVM; Benefit Evaluation;
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