Social and economic evaluation of the project

What is social and economic evaluation of a project? How to evaluate it? 1. Social and economic benefit of the project is the difference between the social and economic benefits gaining from project and cost spent for project implementation. So the analysis of social-economic benefits means to compare what society gains and the cost spent. 2. At an investor’s point of view, when processing a project they are commonly concerned about the project’s profitability, so they must use the financial performance indicators to evaluate the project. However, for the public projects we can not use the financial performance indicators to evaluate that project, so we have to use the social and economic performance indicators to evaluate. 3. The evaluation of social and economic benefits are made by the following criteria: Increasing people’s living standard: It is primarily expressed through income per capita. Income distribution and social justice: It is primarily expressed through investment into less developing areas to shorten the gap between rich and poor areas and make social development fairer. Creating jobs: Here’s one of the strategic targets of social and economic development of government. Protection and regeneration of ecological environment, … 4. Social and economic benefit evaluation method: It depends on the point of view of the managers so they can apply the certain method. And at the manager’s point of view, they commonly consider some factors such as level of creating jobs, revenue, people’ living standards, regeneration of environment, labor productivity, etc,.. 5. In conclusion, based on above analysis, we can see that analysis of financial performance is completely different from the analysis of social and economic performance of the project . The analysis of financial performance is based on the project aspect to consider while the analysis of social and economic performance is based on the social aspect. The goal of financial performance analysis is to maximize profits, while the goal of social and economic performance analysis is to maximize social and economic benefits.

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