Cost-Benefit Analysis

Alternative label: 
CBA
Definition: 

A framework of analysis based on economic rationality (within a number of constraints one will always try to make that decision that increases her individual welfare) and founded on welfare economics. CBA compares costs and benefits of different alternatives and provides rational criteria for decision-making.ᅠ
CBA is a critical input for some decisions but does not replace decisions themselves (i.e. its result is not a binding one). CBA quantifies in monetary terms and compares the pros and cons of any initiative, including items for which the market does not provide a satisfactory measure of economic value. CBA yields profitability indicators, financial, economic or social, on the basis of information throughout the lifespan of the project. It is to be used when the objectives of different NWRM or Programmes of Measures are not the same, that is to say, when what is at stake is not just a set of alternative measures themselves but also different collective aims.

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Last updated: 04 Mar 2015 | Top