  In this paper we develop a cost-benefit analysis of a major research
infrastructure, the Large Hadron Collider (LHC), the highest-energy accelerator
in the world, currently operating at CERN. We show that the evaluation of
benefits can be made quantitative by estimating their welfare effects on
different types of agents. Four classes of direct benefits are identified,
according to the main social groups involved: (a) scientists; (b) students and
young researchers; (c) firms in the procurement chain and other organizations;
(d) the general public, including onsite and website visitors and other media
users. These benefits are respectively related to the knowledge output of
scientists; human capital formation; technological spillovers; and direct
cultural effects for the general public. Welfare effects for taxpayers can also
be estimated by the contingent valuation of the willingness to pay for a pure
public good for which there is no specific direct use (i.e., as non-use value).
Using a Monte Carlo approach, we estimate the conditional probability
distribution of costs and benefits for the LHC from 1993 until its planned
decommissioning in 2025, assuming a range of values for some critical
stochastic variables. We conservatively estimate that there is around a 90\%
probability that benefits exceed costs, with an expected net present value of
about 2.9 billion euro, not considering the unpredictable applications of
scientific discovery.
