Social Cost-Benefit Analysis of HL-LHC

FCC Document Report No. CERN-ACC-2018-0014

38 Pages Posted: 6 Aug 2018

See all articles by Andrea Bastianin

Andrea Bastianin

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS); Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

Massimo Florio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Date Written: May 22, 2018

Abstract

We present a Social Cost–Benefit Analysis (CBA) of the High Luminosity upgrade of the Large Hadron Collider (HL-LHC), assessing its economic costs and benefits up to 2038. The Net Present Value (NPV) of the HL-LHC project is positive at the end of the observation period. The ratio between incremental benefits and incremental costs of the HL-LHC with respect to continue operating the LHC under normal consolidation (i.e. without high-luminosity upgrade) is slightly over 1.7, meaning that each Swiss Franc invested in the HL-LHC upgrade project pays back approximately 1.7 CHF in societal benefits. Simulations based on 50000 Monte Carlo rounds show that there is a 94% chance to observe a positive NPV (i.e. a quantifiable economic benefit for the society). The attractiveness of CERN for Early Stage Researchers (ESR) is key for a positive CBA result. Given that benefits to ESRs are the single most important societal benefit, CERN should invest more in activities facilitating the transition to the international job market. Technological spillovers are another very important ingredient in the CBA evaluation of CERN research infrastructures. Relations with firms in the supply chain and development of Information and Communication Technologies (ICT) are strategic levers CERN should use to boost these social benefits. Cultural effects, especially those related to onsite visitors, have a great development potential for generating societal benefits. This part needs to be quantified in greater detail to understand, how this benefit potential can be further increased efficiently in cooperation with the host states.

Keywords: Cost-Benefit Analysis, HL-LHC

JEL Classification: D61

Suggested Citation

Bastianin, Andrea and Florio, Massimo, Social Cost-Benefit Analysis of HL-LHC (May 22, 2018). FCC Document Report No. CERN-ACC-2018-0014. Available at SSRN: https://ssrn.com/abstract=3202220 or http://dx.doi.org/10.2139/ssrn.3202220

Andrea Bastianin

Università degli Studi di Milano-Bicocca - Department of Economics, Management and Statistics (DEMS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milan, 20126
Italy

Università degli Studi di Milano-Bicocca - Center for European Studies (CefES)

U6 Building
Viale Piero e Alberto Pirelli, 22
Milano, 20126
Italy

Massimo Florio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

Via Conservatorio 7
I-20122 Milano, 20122
Italy
+39 02 50321510 (Phone)
+39 02 50321505 (Fax)

HOME PAGE: http://www.demm.unimi.it/ecm/home

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