Impact assessments

Impact assessments provide qualitative and quantitative insights into the effects of policy measures or investment choices. They create clarity for governments, for example about whether a law or regulation will have the desired effect.

Impact assessments at micro level

The research methods we employ go beyond standard social cost-benefit analyses (SCBAs).

The value case method

One of the research methods we employ within impact assessments is the value case method. This involves analysing the situation with numerous stakeholders and diverse objectives. We examine the impact of a measure or decision from the perspective of all these stakeholders – both the positive impacts (benefits) and negative impacts (costs).

The phrase ‘costs and benefits’ can quickly evoke financial associations. However, the value case method goes beyond that. Besides financial impacts, we also take environmental and social impacts into account. We examine the impact on well-being, for example.

Net present value (NPV)

A standard component of impact assessments and value case analysis is the net present value (NPV) calculation. This calculation is needed to give the green light, in financial terms, to an investment decision.

Is the investment taking place in an uncertain market? If so, we replace the NPV with the real options (RO) method. This incorporates the uncertain future into the calculation of future costs and benefits.

Another microeconomic analysis that we apply in an impact assessment is market modelling. In a market model we calculate the feasibility of goals for one specific sector (e.g. the energy sector).

Impact assessments at macro level

At the macro level we also use different methods and models for our impact assessments. They include the input-output model and the computable general equilibrium model (CGEM). These models mainly shed light on the economic structure and the impact that a policy measure or investment choice has on it, both directly and indirectly.