Glossary of Terms

Activity Activities, also called processes, are the actions that transform inputs into outputs.  Activities are collections of tasks and work-steps performed to produce the outputs of a programme. 
Additionality The amount of output from a policy as compared with what would have occurred without the intervention.
Benchmarking Benchmarking is the quantitative and/or qualitative comparison of project or programme effects to a base case.
Benefit-Cost Ratio (B/C) The Benefit-Cost Ratio is the ratio of discounted benefits to discounted costs. At minimum it should be greater than one.
Cost-Benefit Analysis Comparison of the costs and benefits associated with alternative ways of achieving a specific objective. Monetary values are assigned to both costs and benefits.
Cross comparators Cross comparators are projects or programmes similar to the project or programme under review that are used to make a comparative assessment of the performance of the project or programme that is the subject of the review. In using data on cross comparators to make such assessments, full account must be taken of the similarities and differences in characteristics between them and the project or programme under review.
Deadweight Deadweight: Deadweight is that portion of increased output that would have happened anyway irrespective of the project or programme.
Displacement Displacement occurs when the creation of a positive programme output in one area leads to a loss of output in another.
Double-counting Double-counting occurs when pecuniary benefits are added to the real benefits derived by the final consumer. As a general rule pecuniary benefits are not additional and should not be included in Cost-Benefit Analysis.
Economy Acquisition of resources in the right quantity and of a quality no higher than is needed for the job, at the appropriate time, and at the lowest obtainable price.
Effectiveness The extent to which the objectives of a policy are achieved.
Efficiency The ratio of the output of an activity to the resources used to produce that output.
Impact Impacts are the wider effects of the programme, from a sectoral or national perspective, in the medium to long term.
Input There are many inputs to programmes – physical inputs like buildings and equipment, data inputs like information flows, human inputs (grades of staff) and systems inputs like procedures.  The financial input is the budget made available to the programme.  Inputs are sometimes referred to as resources.
Internal Rate of Return (IRR) Maximum rate of interest that a proposal can afford to pay for resources used which allows the proposal to cover its investment and operating expenses and still break even. In other words, the IRR is the discount rate which will make the NPV of a proposal equal zero.
Multi-Criteria Analysis (MCA) MCA can be used to describe any structured approach to determine overall preferences among alternative options, where the options should accomplish multiple objectives. The term covers a wide range of techniques that share the aim of combining a range of positive (benefits) and negative (costs) effects in a single framework to allow for easier comparison of alternative options in decision-making.

 

Net Present Value (NPV): NPV is the sum of the discounted benefits less the sum of the discounted costs.
Output The outputs are what are produced by a programme. They may be physical goods or services.
Pecuniary benefits Pecuniary benefits derive from changes in relative prices in secondary markets, and are not a net gain to society e.g. increased property prices along a new Luas line.
Real benefits Real benefits are those derived by the final consumer. They add to the welfare of society and can be offset against the real cost of resources used e.g. time savings in travel due to a road improvement project.
Result The results are the effects of the outputs on the targeted beneficiaries in the immediate, short or medium term.  Results can be positive or negative, and intended or unintended.
Shadow prices Shadow prices are artificial prices constructed where market prices provide a poor guide to social values or where market prices do not exist e.g. the value of time saved due to a road improvement project.
Sponsoring Agency The organisation that will be responsible for project or programme implementation. It also carries out the appraisal, evaluation and review. It needs approval at key points from the Sanctioning Authority
Sanctioning Authority The organization that is responsible for granting the approvals required as projects proceed through the life-cycle. It also has to satisfy itself that the Sponsoring Agencies procedures are adequate.
Strategic Objectives Describe the desired outcome from a programme at the end of the strategy period.  The objectives should ideally be written in terms of a quantifiable and qualitative description of the programme.
Transfer payments Transfer payments transfer part of a project’s or programme’s benefit from one member of society to another.