Cost-Effectiveness Analysis Based On The Projection Pursuit

In the field of projects appraisement, the sustainable development means that the decision-making on the projects should take account the project effectiveness of environmental impact and economic benefits.The cost-benefit analysis (CBA) contains the measurement of environmental externalities, but it demands all the costs and benefits must be measure by monetary unit and the application of CBA will be hinder in the projects appraisement. Because of the defect of CBA itself and the uncertainty of environmental impact assessment, the CBA cannot be applied effectively on the project appraisement in practice. So we should look for a comprehensive assessment method, which can avoid to measure the environmental externalities by monetary unit, and will integrate the of environmental impact and economic benefits.This paper focuses on the Projection Pursuit (PP) acted as a comprehensive clustering method in the cost-effectiveness analysis, which including both factors of environmental quality and economic efficiency. The analysis of the economic assessment explains that, instead of the CBA, we should use the cost-effectiveness analysis in the comprehensive assessment by lack of effective way to measure the environmental externalities by monetary unit. So we can realize to co-ordinate the relationship of the environmental protection and the development in the project decision-making. Finally, this paper draws a conclusion that the PP evaluation model can lead to the target, provided the expected goal including the both factors of environmental impact and economic benefits of an industry.