Background:This web application enables a cost-benefit analysis to be conducted for a proposed Pest Management Programme within a Regional
Pest Management Plan as required by the New Zealand Biosecurity Act 1993. It is suitable for the "Exclusion", "Eradication", "Progressive Containment"
and "Sustained Control" programme types defined in the National Policy Direction but not the "Protecting Values in Places" programme. The model assumes that the
pest would spread logistically in the absence of the programme and that the management would prevent this spread. The Benefits in the CBA are the lost
earnings that would be prevented by the management and the Costs are the sum of the programme's implementation costs and lost earnings in the infested area.
The results of the analysis are presented firstly as a graph of the spread of the pest over time under a no-management scenario, secondly as a graph of
pest spread under a managed scenario and thirdly as a graph of the discounted values of the Benefits and Costs of the programme. The Net Present Value
of the programme is the sum of the discounted Costs and Benefits and this is presented along with the Internal Rate of Return (the discount rate giving NPV=0.0).
When interpreting the results consider whether the scenario report is reasonable and defendable. For a programme to be considered economically
worthwhile it should have an NPV greater than zero. An important step in interpreting the results is to see how sensitive the NPV and IRR values are
to changes in your parameter values. This sensitivity testing can be conducted by moving the sliders or typing in alternative values.
For guidance on cost-benefit analysis visit https://www.treasury.govt.nz/information-and-services/state-sector-leadership/guidance/financial-reporting-policies-and-guidance/discount-rates
For a complete description of the CBA model please refer to Bourdot et al. (2015) and Basse (2015).