Cost-benefit analysis

Cost-benefit analysis estimates the ratio between the cost and the benefit of the intervention. Interventions with a lower ratio are said to provide a higher return. Cost-benefit analysis can be used in finance or business to refer only to private returns to an intervention, but in the context of effective altruism,altruism, it is more relevant to consider social costs and social benefits.

In cost-benefit analysis, both cost and benefit are measured in monetary terms (in contrast to cost-effectiveness analysis, where benefits are expressed in terms of some non-monetary outcome)unit). CostsAlthough costs are generally already monetary. However,monetary, the outcomes of a program may be primarilyare often non-monetary (for instance, thea program might mostlymay have impact mostly by improving health). In such cases, a monetary value will be assigned to the non-monetary unitbenefit (for instance, a value will be assigned to a year of additional healthy life). Then all non-monetary benefits will be converted into a monetary form,unit, for comparison with costs. The valuation of non-monetary benefits is often a difficult and contentious aspect of cost-benefit analysis.

Cost-benefit analysis can be carried out on an average level (looking at the total cost and total impact of an intervention), or at the marginal level (examining the impact of an additional dollar).

Cost-benefit analysis (CBA) is a collection of methods for evaluating the social costs and benefits of alternative social events.arrangements.

Bronsteen, John, Christopher Buccafusco & Jonathan S. Masur (2012) Well-being analysis vs. cost-benefit analysis, Duke Law Journal, vol. 62, p. 1603.pp. 1603–1689.

Hansson, Sven Ove (2019) Cost-benefit analysis: Philosophical issues, in The New Palgrave Dictionary of Economics, London: Palgrave Macmillan, pp. 2388–2391.

Weimer, David L. (2019) Cost-benefit analysis, in The New Palgrave Dictionary of Economics,London: Palgrave Macmillan, pp. 2383–2388.

Hansson, Sven Ove (2019) Cost-benefit analysis: Philosophical issues, in The New Palgrave Dictionary of Economics, pp. 1–4.2388–2391.

Weimer, David L. (2019) Cost-benefit analysis, in The New Palgrave Dictionary of Economics, pp. 2383–2388.

Further reading

Bronsteen, John, Christopher Buccafusco & Jonathan S. Masur (2012) Well-being analysis vs. cost-benefit analysis, Duke Law Journal, vol. 62, p. 1603.

Hansson, Sven Ove (2019) Cost-benefit analysis: Philosophical issues, in The New Palgrave Dictionary of Economics, pp. 1–4.

Sen, Amartya (2000) The discipline of cost-benefit analysis, The Journal of Legal Studies, vol. 29, pp. 931–952.

Related entries

cost-effectiveness | cost-effectiveness analysis | economics | welfare economics

In cost-benefit analysis, both cost and benefit are measured in monetary terms (in contrast to cost-effectiveness analysis,analysis, where benefits are expressed in terms of some non-monetary outcome). Costs are generally already monetary. However, the outcomes of a program may be primarily non-monetary (for instance, the program might mostly have impact by improving health). In such cases, a monetary value will be assigned to the non-monetary unit (for instance, a value will be assigned to a year of additional healthy life). Then all non-monetary benefits will be converted into a monetary form, for comparison with costs. The valuation of non-monetary benefits is often a difficult and contentious aspect of cost-benefit analysis.

Cost-benefit analysis (CBA) is a collection of methods for evaluating the social costs and benefits of alternative social events. CBE measures these

Cost-benefit analysis estimates the ratio between the cost and the benefit of the intervention. Interventions with a lower ratio are said to provide a higher return. Cost-benefit analysis can be used in finance or business to refer only to private returns to an intervention, but in the context of effective altruism, it is more relevant to consider social costs and social benefits.

In cost-benefit analysis, both cost and benefit are measured in monetary terms (in contrast to cost-effectiveness analysis, where benefits usingare expressed in terms of some non-monetary outcome). Costs are generally already monetary. However, the outcomes of a common currency, whichprogram may be primarily non-monetary (for instance, the program might mostly have impact by improving health). In such cases, a monetary value will be assigned to the non-monetary unit (for instance, a value will be assigned to a year of additional healthy life). Then all non-monetary benefits will be converted into a monetary form, for comparison with costs. The valuation of non-monetary benefits is typicallyoften a difficult and contentious aspect of cost-benefit analysis.

Cost-benefit analysis can be carried out on an average level (looking at the currencytotal cost and total impact of monetary value.an intervention), or at the marginal level (examining the impact of an additional dollar).

Cost-benefit analysis (CBA) is a collection of methods for evaluating the social costs and benefits of alternative social events. CBE measures these costs and benefits using a common currency, which is typically the currency of monetary value.