CUED
Center
for Urban Economic Development
University of Illinois at Chicago
A
Methodology and Measuring the Benefits and Costs of Economics Development Programs:
Case Studies Using the CUED Evaluation Spreadsheet
Project Number: 362-B
Report Date: April 1994, rev
Author(s): Joseph Persky, Daniel Felsenstein, Wim Wiewel
The City of Chicago Department of Planning and Development carries out numerous economic development projects to promote the welfare of the City. In a democratic government there will always be contending strategy agendas reflecting legitimate differences in viewpoint and interest between different groups within the City. Too often, however, disputes over specific projects have been based on inadequate information concerning the expected economic impacts of those projects. Developing a methodology for predicting the benefits and costs of projects can provide an important input into the ongoing administration of Department projects.
CUED is recommending that the Department use cost-benefit analysis as a major component of its project selection process. The cost-benefit approach provides a straightforward and business-like way to organize project related data, measure project efficiency and estimate the distribution of project benefits among different income groups in the City.
The methodology presented in sections II-VII focusses on estimating measurable dollar benefits in terms of income and taxes. These estimates are important for any projects which promise to increase the number of jobs for Chicago residents. Section VIII, along with appendix C, then explains in detail our approach to neighborhood spillovers, while Section IX presents directions for further research aimed at improving the model.
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