---
title: "Socio-economic survey and social cost benefit analysis"
subject: "Project Engineering"
chapter: 2
key: "semester_7/project_engineering:socio-economic-survey-scba"
source: https://www.bctengineer.com/q/semester_7/project_engineering/socio-economic-survey-scba
site: BCT Engineering
---

# Socio-economic survey and social cost benefit analysis

Project Engineering · Chapter 2: Project Appraisal and Project Formulation

- Asked in: 2068 Baisakh (old course), 8 marks; 2065 Shrawan (old course), 4 marks; 2066 Bhadra (old course), 4 marks (asked 3 times)
- Video: [Social Cost Benefits analysis | Objectives | SCBA | Rationale | B Com Notes ](https://www.youtube.com/watch?v=I4LMmdNS2Gk) — Sachin Education Hub
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_7/project_engineering/socio-economic-survey-scba
- Whole chapter: https://www.bctengineer.com/md/semester_7/project_engineering/chapter-2

## Question

Describe socio-economic survey and also social and ordinary cost benefit analysis.

## Short answer

A socio-economic survey collects data on population, income, occupation, education, health, land and attitudes of the project area. Ordinary CBA uses market prices and only the owner's costs and returns, while social CBA uses shadow prices, includes externalities, excludes taxes and subsidies, and judges benefit to society.

## Answer

#### Socio-economic survey
A socio-economic survey collects data on the people and economy of the project area: population, households, income, occupation, education, health, land holding, infrastructure, gender and caste composition, and attitude to the project.

- Methods: questionnaire, interviews, focus groups, field observation, existing records.
- Uses: finds beneficiaries and affected people, estimates demand and benefits, plans resettlement and compensation, supports social cost benefit analysis and environmental assessment.

#### Ordinary (financial) cost benefit analysis
Considers only costs and returns to the owner at **market prices**, including loan interest and taxes. It asks whether the project is profitable for the investor.

#### Social cost benefit analysis (SCBA)
Considers all costs and benefits to society, using **shadow (economic) prices**, excluding transfer payments such as taxes and subsidies and including externalities (pollution, time saved, employment). It asks whether the project is good for the nation.

| Basis | Ordinary CBA | Social CBA |
|---|---|---|
| Viewpoint | Investor | Society |
| Prices | Market | Shadow |
| Externalities | Ignored | Included |
| Taxes, subsidies | Included | Transfers, excluded |
| Discount rate | Cost of capital | Social discount rate |
| Indicator | Financial IRR, NPV | EIRR, economic NPV, B/C |

Decision rule: accept if $B/C > 1$ and $NPV > 0$.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. What does a socio-economic survey collect?
   A. Data on people and economy of the project area such as population, income, occupation and attitude to the project
   B. Cement prices only
   C. Contractor rates only
   D. Geological data only
   Answer: A. It collects data on the people and economy of the area. (Key point: Socio-economic survey)

2. Which describes ordinary (financial) CBA?
   A. Costs and returns to the owner at market prices, including loan interest and taxes
   B. Includes externalities
   C. Excludes interest
   D. Costs and benefits to society at shadow prices
   Answer: A. It asks whether the project is profitable for the investor. (Key point: Ordinary CBA)

3. What prices does SCBA use?
   A. Shadow (economic) prices
   B. Bid prices
   C. Market prices
   D. Retail prices
   Answer: A. SCBA uses shadow prices. (Key point: SCBA prices)

4. How does SCBA treat taxes and subsidies?
   A. Includes them as costs
   B. Counts them as benefits
   C. Doubles them
   D. Excludes them as transfer payments
   Answer: D. Transfers are excluded, while externalities are included. (Key point: Transfer payments)

5. What is the decision rule stated?
   A. Accept if B/C > 1 and NPV > 0
   B. Accept always
   C. Accept if B/C < 1
   D. Accept if NPV < 0
   Answer: A. A viable project has B/C greater than 1 and positive NPV. (Key point: Decision rule)

## Related in Project Engineering

- [Project proposal; cost benefit analysis for road](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aproposal-cba-road-project) — Project Engineering, chapter 2
- [Short note: Cost-benefit analysis](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Acost-benefit-analysis-note) — Project Engineering, chapter 2
- [EIA; shadow pricing, externalities, social CBA](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aeia-shadow-pricing-externalities) — Project Engineering, chapter 2

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- [Optimize capacity by marginal cost-benefit](https://www.bctengineer.com/question.md?key=semester_7%2Fhydropower_engineering%3Amarginal-cost-benefit-installed-capacity) — Hydropower Engineering, chapter 3
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