Partial budgeting & discounting
9 important questions on Partial budgeting & discounting
What are the 8 stakeholders in food safety decision making?
- Microeconomics
- society
- Companies
- Suppliers
- Primary producers
- Consumers
- Government
- International trade
What are +/- of concentratie in the food system ?
-: High level of control with big companies
- Market failure, unbalanced market power
- Food safety incidents are larger
What are consequence of small farms?
- Small seize of production
- Investments not always efficient
- Farm and family are strongly related
- behaviour not always rational
- Many people to work with .... Many possibilities for
- mistakes
- Non-compliance
- Higher grades + faster learning
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What is formula for Partial budgeting?
What two types of investment ?
- Replacement of current equipment
- Investment in equipment the does "more"
What is cost-benefit analysis with discounting ?
- Takes time into account (interest)
- Time preference of money
- Method to use when costs and benefits differ over time
- Long term programs
What are measure of value?
- Net present vale (NPV)
- Benefit-cost Ratio (B/C ratio)
- Internal rate of return (IRR), invent an intrest is equal
Three notes for discount rate?
- Economist assumptions rational behaviour
- Discount rate: based upon rational findings
- Human behaviour is different
- Time preference of money
- Gain-loss disparity
- Uncertainty
What about distribution of costs and benefits?
- Measure may be cost-effective over the taal chain
- If costs and benefits differ between stakeholders:
- Motivation to co-operate might differ
- Winners vs losers
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