cost-benefit analysis

cost-benefit analysis
A method of setting out the factors which need to be taken into account in making choices about major investments in public-sector projects. The objective is to assign monetary values to and weight all costs and all benefits, social and economic, so that one can see clearly whether the benefits exceed the costs of a venture. The method is normally applied to major public projects such as a new dam, airport, urban motorway, university, or a scheme for the unemployed, but the approach could in principle be applied to other private-sector investments or personal choices, as an aid to decision-making. The appraisal differs from commercial project appraisal because costs and benefits to all members of society are included-not only the monetary expenditures and receipts of the investor-so that, for example, environmental costs and the costs of social severance are included with other diffuse social costs and benefits.
The main difficulty with cost-benefit analysis is how to assign monetary values to social costs and benefits, especially when these affect different social groups, users and non-users of the proposed facility. The objection most often raised is that it gives a spurious air of economic rationality and objectivity to decisions that are necessarily social and political in nature.

Dictionary of sociology. 2013.

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  • Cost–benefit analysis — (CBA), sometimes called benefit–cost analysis (BCA), is a systematic process for calculating and comparing benefits and costs of a project for two purposes: (1) to determine if it is a sound investment (justification/feasibility), (2) to see how… …   Wikipedia

  • Cost-benefit analysis — is a term that refers both to:* a formal discipline used to help appraise, or assess, the case for a project or proposal, which itself is a process known as project appraisal; and * an informal approach to making decisions of any kind. Under both …   Wikipedia

  • cost-benefit analysis — ➔ analysis * * * cost benefit analysis UK US noun [C or U] (ABBREVIATION CBA) ► ECONOMICS the process of comparing the costs involved in doing something to the advantage or profit that it may bring: »The cost benefit analysis found that employing …   Financial and business terms

  • cost-benefit analysis — noun an analysis of the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs • Hypernyms: ↑analysis, ↑analytic thinking * * * cost benefit analysis ● cost * * * cost benefit analysis UK US noun… …   Useful english dictionary

  • cost–benefit analysis — ▪ economics       in governmental planning and budgeting, the attempt to measure the social benefits of a proposed project in monetary terms and compare them with its costs. The procedure, which is equivalent to the business practice of cost… …   Universalium

  • cost-benefit analysis — UK / US noun [countable] Word forms cost benefit analysis : singular cost benefit analysis plural cost benefit analyses business a comparison of the likely costs of a plan or project with the benefit it will bring, done in order to help make a… …   English dictionary

  • Cost-Benefit Analysis — A process by which business decisions are analyzed. The benefits of a given situation or business related action are summed and then the costs associated with taking that action are subtracted. Some consultants or analysts also build the model to …   Investment dictionary

  • cost-benefit analysis — An appraisal of the costs of an undertaking (or potential undertaking) in comparison with its *rewards. Cost benefit analysis is often used to determine the economic viability of *capital expenditure and investments. See also *zero base budgeting …   Auditor's dictionary

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