Reassessment of the Cross-Florida Barge Canal: A probability approach

This reassessment of the Corps of Engineers' study of the Cross-Florida Canal demonstrates the application of the Weibull probability distribution to handle uncertainty in benefit-cost analysis and illustrates the distribution's use to incorporate environmental considerations in project analysis. With range and probability assumptions to reflect the criticisms of the Corps' study, it is shown that the Canal was a high-risk project even with the inappropriately low discount rate used. Use of the Weibull distribution is shown to be superior to the usual point estimates and range sensitivity tests in benefit-cost analysis.