COST BENEFIT ANALYSIS IN THE RESEARCH, DEVELOPMENT AND INNOVATION SECTOR

Transcription

1 EIB UNIVERSITY RESEARCH SPONSORSHIP PROGRAMME COST BENEFIT ANALYSIS IN THE RESEARCH, DEVELOPMENT AND INNOVATION SECTOR UNIVERSITY OF MILAN - DEPARTMENT OF ECONOMICS, MANAGEMENT AND QUANTITATIVE METHODS UNIVERSITY OF MILAN - DEPARTMENT OF PHYSICS CSIL - CENTRE FOR INDUSTRIAL STUDIES Luxembourg, 23 April

2 GOALS OF THE STUDY Developing a CBA theoretical model for evaluating research infrastructure (RI) Testing the CBA model on two case studies Enabling funding agencies to assess the potential future net social benefits generated by a RI SSC (abandoned) ISS International Space Station LHC Large Hadron collider 2

3 THE MODEL The E(NPV) of research infrastructures over the time horizon T is defined as the expected difference between benefits and costs valued at shadow prices and discounted at the social discount rate r. It can be decomposed in two parts: the expected net present value of use-benefits and costs NPVu and the expected (non-use) social value of discovery Bn. We drop the expectation operator, but all variables are to be considered as stochastic. NPV RI = NPV u + B n = PV Bu PV Cu + B n B u = Knowledge creation + Technological spillovers + Human capital formation + Cultural effects + Services provided by applied RI C u = Investments + Operational costs B n = Existence value + Quasi option value 2

4 BENEFITS The present value of use-benefits and costs NPVu is the sum of the economic value of: Knowledge output (S) Human capital formation (H) Technological externalities (T) Cultural effects (C) Services provided by applied RI (A) The non-use benefits Bn captures two types of benefits related to the social value of discovery: the quasi-option value & the existence value EXV t QOV t 2

5 TWO PILOT CASE STUDIES Cumulative Distribution Function (thousand Euro) CERN Large Hadron Collider (LHC), Geneve Cumulated probability Mean Median Std. Dev. from mean , ,853 2,558,782 4,269,712 5,980,641 7,691,570 (thousand Euro) Pure research infrastructure Applied research infrastructure National Hadrotherapy Center for Cancer Treatment (CNAO) in Pavia, Italy # Pathology Clinical alternative 1 Proton radiation therapy for chordomas and chondrosarcomas of the skull base 2 Proton therapy of spine chordoma and chondrosarcoma 3 Proton therapy of intracranial meningioma Type of benefit Marginal percentage of patients who fully recover compared to the counterfactual situation identified in the third column (for benefit of TYPE 1) Number of life years gained thanks to hadrontherapy with respect to the counterfactual situation identified in column 2(for benefit of TYPE 2) No alternative TYPE 1 73% - No alternative TYPE 1 73% - No alternative TYPE 1 33% - 4 Proton therapy of brain tumors No alterative* TYPE Proton therapy of recurrent cervico-cephalic area tumors 6 Proton boost for locally advanced cervico-cephalic area tumors No alterative* TYPE No alternative for advanced tumours TYPE 2 15% 5 7 Proton therapy of glioblastoma No alterative TYPE 3 100% 1 8 Proton re-irradiation of recurrent spine chordoma and chondrosarcoma 9 Carbon ion therapy of adenoid cystic carcinoma of salivary glands 10 Carbon ion re-irradiation of No alterative TYPE 2 43% 3 Surgery + photon therapy 8 TYPE 1 45% - Surgey TYPE 1 21% -

6 ACTIVITIES IN NUMBERS 1020 interviews at students (Milan, Paris, Exeter, a Coruña) 280 interviews at PhD students and Post-docs at Cern More than 1oo interviews with scientists, managers, experts, firms More than 15 researchers involved in the project 4

7 OUTCOME AND DISSEMINATION 4 published working papers 4 forthcoming working papers An operational manual XIII Milan European Economy Workshop «The cost-benefit analysis of research infrastructures», June 2014 Presentation of the model at Seventh Annual Conference and Meeting of the Society for Benefit-Cost Analysis, Advancing the Policy Frontier - March 19-20, Washington, D.C. Call for papers for a special issue on Technology Forecasting and Social Change Final event in Brussels hosted by DG Research 4

8 DISSEMINATION ACTIVITIES 5

9 DISSEMINATION ACTIVITIES 5

10 RESEARCH RESULTS: FORTHCOMING 4

11 DISSEMINATION ACTIVITIES: FORTHCOMING THE USE OF COST-BENEFIT ANALYSIS IN THE EVALUATION OF RESEARCH INFRASTRUCTURES AND MAJOR R&D PROGRAMMES Presenting the results of the research project Cost-Benefit Analysis in the Research, Development and Innovation Sector, sponsored by the EIB Institute (University Research Sponsorship Programme -EIBURS) FINAL EVENT November 13th 2015 DG Research, Brussels 5

12 THANK YOU! 12