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 put a dollar value on intangible items, such as the benefits and costs associated with living in a certain town. Most analysts will also factor opportunity cost into such equations.

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Prior to erecting a new plant or taking on a new project, prudent managers will conduct a cost-benefit analysis as a means of evaluating all of the potential costs and revenues that may be generated if the project is completed. The outcome of the analysis will determine whether the project is financially feasible, or if another project should be pursued.

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Comparison of the cost of a solution and the economic benefits that would accrue if the solution is put into effect. This analysis is a prerequisite to the installation of an employee benefit plan. Questions to be answered include: (1) will the cost result in greater loyalty of employees? (2) will the cost result in greater productivity; and (3) will the benefits encourage employees to participate in their cost?

A decision-making process, often used in public finance, that forces the decision maker to compare all direct and indirect positive and negative effects of the proposed decision on an objective basis, usually in dollars. Benefits must exceed costs to justify the project or adopt the policy.
Example: Cost-benefit analysis traditionally has been used to evaluate the feasibility of public projects. Today, it is being advocated as a method to evaluate the advisability of environmental and business regulation.

Cost-benefit analysis is used for determining which alternative is likely to provide the greatest return for a proposed investment. Sometimes referred to as cost-effectiveness analysis, it is relevant to businesses as well as to not-for-profit entities and governmental units.

A business might find it helpful to use cost-benefit analysis to determine if additional funds should be invested in a facility in the home country or in another country. A community not-for profit organization that provides a variety of programs for children might use cost-benefit analysis to assist management in determining which activities will provide the most services for the costs specified. A federal governmental agency might use cost-benefit analysis to determine which of several projects planned for the national parks is likely to be most used, given the costs, by interested citizens.

Because resources such as money and time are limited, an organization usually cannot undertake every project proposed. To decide whether to undertake a project, decision makers weigh the benefits from the project against the cost of the resources it requires, normally approving a project when its benefits exceed its costs. Cost-benefit analysis provides the structure and support for making such decisions.

Benefits increase the welfare of the organization. Some benefits are monetary benefits, such as the dollar amount of cash inflows from additional sales of a product or the saving in cash outflows that a project enables. Other benefits are important but harder to quantify. For example, a project may increase customer satisfaction; increased customer satisfaction may increase future sales, but the exact relationship between sales and satisfaction is often hard to specify.

Costs are the outlays or expenditures made in order to obtain a benefit. Many costs are measured monetarily, such as the cost of buying a new machine or of hiring an additional employee.

Cost-Benefit Analysis in Business

A cost-benefit analysis is straightforward when all costs and benefits are measurable in monetary terms. Assume that Company A must decide whether to rent an ice cream machine for the summer for $900. The ice cream machine will produce additional cash inflows of $1,000 during the summer. The benefit of additional cash in-flows ($1,000) exceeds the additional cost ($900), so the project should be undertaken. Not all cost-benefit analyses are this simple, however. If the benefits and costs occur in different time periods, it may be necessary to discount the future cash flows to their equivalent worth today.

In another example, cost savings is a benefit. Assume that Company B makes about 100,000 photocopies a year. Company B does not have its own copy machine and currently pays 4 cents per copy, or $4,000 a year, to Copycat Copiers. Company B can lease a copy machine for $2,500 a year. It must also pay 2 cents per page for paper for the leased machine, or $2,000. In this example, the cost of leasing the machine and buying paper ($2,500 $2,000 $4,500) exceeds the benefit of saving the $4,000 normally paid to Copycat Copiers. Company B should continue to use Copycat Copiers for its photocopies. However, Company B must have a pretty good estimate of the number of copies it needs to be comfortable with its decision. If Company B needs 150,000 copies this year instead of 100,000, the cost of the leasing the machine and buying paper ($2,500 $3,000 $5,500) is cheaper than the $6,000 (150,000 $0.04) savings in fees to Copycat Copiers.

A third example involves a project with benefits that are difficult to quantify. Assume that Company C is deciding whether to give a picnic costing $50,000 for its employees. Company C would receive the benefit of increased employee morale from the picnic. Better employee morale might cause employees to work harder, increasing profits. However, the link between increased morale and increased monetary profits is tenuous. The decision maker must use his or her judgment to compare the nonmonetary benefit to the monetary cost, possibly deciding that increased employee morale is worth the $50,000 cost but would not be worth a $100,000 cost.

In the preceding examples, cost-benefit analysis provided a framework for decision making. The range of objectivity related to measurement of the factors is typical. Techniques used in business as a basis for determining costs and benefits, such as return on investment, are generally quantifiable and thus appear to be objective. However, it is not uncommon for qualitative factors to enter into the decision-making process. For example, providing a product that individuals with limited incomes will be able to purchase may not provide the highest monetary return on investment in the short run, but might prove to be a successful long-term investment. Careful decision makers attempt to deal with a difficult-to-quantify factor in as objective a manner as possible. However, cost-benefit analysis in most situations continues to introduce measurement problems.

Cost-Benefit Analysis in Nonbusiness Entities

Cost-benefit analyses are also common in non-business entities. Boards of not-for-profit organizations establish priorities for their programs, and such priorities often specify desired program outputs. For example, assume a not-for-profit organization is interested in reducing the level of illiteracy among the citizens of a rural community in a state that has one of the lowest per- capita incomes in the United States. As alternative programs for those who need to learn to read are considered, there will be cost-benefit analyses that focus on a number of factors, including the extent to which a particular program can attract those who are illiterate. A program in the downtown area of a small town might be considered because a facility is available there at low cost— and that low cost is appealing. Focus on cost is not sufficient, however. When benefits are considered, it might become clear that those who are eager for such a program do not have cars and that there is no public transportation from where they reside to the center of the small town. Further consideration of relevant factors and of alternatives, undertaken in good faith, should result in cost-benefit analyses that provide valuable information as the agency makes decisions.

At all levels of government in the United States, cost-benefit analyses are used as a basis for allocating resources for the public good to those programs, projects, and services that will meet the expectations of citizens. For example, decision makers at the federal level who have policy responsibility for environmental standards, air-quality rules, or services to the elderly often find information from cost-benefit analyses to be critical to the decision-making task.

Continuing Efforts to Quantify Cost-Benefit Factors

As possibilities for the use of funds increase, there is motivation for better measurement of both costs and benefits as well as for speedier ways of accomplishing analyses for alternatives that are appealing. All types of entities—businesses, not for-profit organizations, and governmental units—strive to improve the measurments used in cost-benefit analyses. The capabilities of electronic equipment provide promising assistance in accumulating data relevant for analyses. Wise use of resources is an important goal in every organization; cost-benefit analyses make a key contribution to this goal. Therefore, attention is given to improving both the effectiveness and efficiency of such analyses.

Bibliography

Boardman, Anthony, E. (1996). Cost-Benefit Analysis: Concepts and Practice. Upper Saddle River, NJ: Prentice-Hall.

Nas, Tevik F. (1996). Cost-Benefit Analysis: Theory and Application. Thousand Oaks, CA: Sage Publications.

[Article by: MARY MICHEL; MARY ELLEN OLIVERIO]

The comparative study of the service or production costs of a service or item and its value to the subject.

Benefit-cost analysis is a technique for assessing the desirability of government projects and policies. The basic idea is simple: Consider alternative policies and identify the one that yields the greatest net gain to society. Benefit-cost analysis has been widely used to compare the positive and negative aspects—measured in terms of reduced mortality, morbidity, property damage, and losses to the natural environment—of policies that affect public health and the environment.

Benefit-cost analysis has been widely used in the design of environmental policies and to help resolve disputes under the U.S. legal system. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERLA; commonly called the "Superfund" law) governments (local, state, or federal) can seek financial compensation from responsible parties for natural resources that are damaged by releases of hazardous wastes. Benefit-cost analysis can be helpful in putting a price tag on the damaged resources.

Determining the benefits of pollution reduction generally requires assessing the magnitude of the damage caused by that pollution. This involves four key steps: (1) identification of the key types of damage; (2) establishing the physical relationship between the pollutant emissions and the extent of damages caused (dose-response curve); (3) identification of the responses by affected parties to mitigate some (or all) of the damage; and (4) placing a monetary value on the physical damage, including the damage to human health.

All four of these steps can involve difficult technical issues, especially when both scientific and ethical concerns limit the ability to obtain empirical information on the effect of pollution on humans. Expertise in various natural and social science disciplines is required. The focus of economics is on the fourth step of the process (ascertaining the monetary value of the physical damages, including the damage to human health) and on integrating the results of all the steps.

Some have argued, on both moral and technical grounds, that benefit-cost analysis is a flawed environmental management tool. Others have suggested that it is inevitable, since if it is not done explicitly, with a careful consideration of alternative options, it will occur implicitly. In that case, decision making will be driven by public fears, special-interest lobbying, and bureaucratic preferences.

Three major functions of economic analysis in the regulation of health, safety, and the environment have been identified: (1) arraying information about the benefits of proposed regulations;(2) revealing potentially cost-effective alternatives; and (3) showing how benefits and costs are distributed (e.g., geographically, temporally, and among income and racial groups). However, the same economists also argue that "in many cases, benefit cost analysis cannot be used to prove that the economic benefits of a decision will exceed or fall short of the costs … [but] … it can provide illuminating evidence for a decision, even if precision cannot be achieved" (Arrow et al., 1996).

(SEE ALSO: Acceptable Risks; Benefits, Ethics, and Risks; Cost-Effectiveness; Environmental Impact Statement; Risk Assessment, Risk Management)

Bibliography

Arrow, K. et al. (1996). Benefit-Cost Analysis in Environmental, Health, and Safety Regulation: A Statement ofPrinciples. Washington, DC: American Enterprise Institute, The Annapolis Center, and Resources for the Future.

— RICHARD D. MORGENSTERN

A technique whereby projected public schemes are evaluated in terms of social outcomes as well as the usual profit and loss accounting. The technique begins with an assessment of the costs, benefits, and drawbacks of the scheme, including externalities, such as the generation of noise and other forms of pollution. Financial values are assigned to these, including qualities like aesthetic appearance, which are not usually associated with cost. As most major projects are developed over a long period of time, costs must reflect future conditions. The decision whether to implement the project is made in the light of the comparison between the costs of the project and the likely benefits.

This method is far from trouble free. It is difficult to determine which items should be included, and difficult to put a price on intangibles, such as aesthetic experience (a new power station might be efficient, but extremely ugly; and controversy has raged over ‘costing’ the destruction of Sites of Special Scientific Interest, such as that at Twyford Down, cut through by the M3). The discounting of future costs is particularly problematic, especially as the discount value, which could be based on current interest rates or on a figure set by the government, is often the key variable. Even then, moral judgements have to be made—which group in society should benefit? Should as much weight be given to benefiting the rich as to the poor? These are political questions which cost-benefit analysis cannot answer.

A technique of constructing a balance sheet of the consequences of a project or activity. By definition, it is a method of assessment which uses monetary units. When used by a private company it is essentially a way of calculating what profit or loss can be expected, but it goes beyond simple versions of such a calculation by insisting on a ‘full balance sheet’. On the cost side, for example, this would include the ‘opportunity cost’ of the resources involved, including the income which might be derived from investing available money in assets which carry the minimum risk. Benefits might include good publicity for the company, so that a nominal loss on a project might be shown by cost-benefit analysis to be a real gain.

In the sphere of public investment, cost-benefit analysis takes on extra dimensions of complexity, since it is required to assess the full range of costs and benefits not just to the municipal or nationalized company involved, nor even to the government, but to the whole population. In such a calculation all social costs and benefits must be assessed, including those which are ‘external’ to the transactions involved, which would not be considered by a private company. A calculation as broad as that is tantamount to duplicating the felicific calculus of Benthamite utilitarianism in terms of money, a point which has been generally accepted by enthusiasts and critics alike.

Supporters of cost-benefit analysis argue that it is part of the very idea of rational decision-making. How else are we to find out whether it is better to spend our investment in health or saving lives or alleviating pain? What else can tell us whether the advantages of a new motorway or airport outweigh its disadvantages? Critics regard it as a pseudo-science, a distortion of the values it seeks to assess and an attempt to reduce the serious and evaluative problems of political decision-making to bogus technicalities.

— Lincoln Allison

For more information on cost-benefit analysis, visit Britannica.com.

An analysis of a construction contract with the objective of identifying all the included costs and evaluating their benefits.

A method by which the benefits of pursuing a particular action can be weighed against the costs of pursuing that action. It is suggested that a cost-benefit analysis could be applied to a number of sport situations. Coaches, for example, have been urged to employ the notion that anticipation has certain benefits and costs, and that whether or not to anticipate in a certain situation should be determined by weighing the probable gains against potential losses.

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 definitions the process involves, whether explicitly or implicitly, weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option. The formal process is often referred to as either CBA (Cost-Benefit Analysis) or BCA (Benefit-Cost Analysis).

A hallmark of CBA is that all benefits and all costs are expressed in money terms, and are adjusted for the time value of money, so that all flows of benefits and flows of project costs over time (which tend to occur at different points in time) are expressed on a common basis in terms of their “present value.” Closely related, but slightly different, formal techniques include Cost-effectiveness analysis, Economic impact analysis, Fiscal impact analysis and Social Return on Investment(SROI) analysis. The latter builds upon the logic of cost-benefit analysis, but differs in that it is explicitly designed to inform the practical decision-making of enterprise managers and investors focused on optimising their social and environmental impacts.

Contents 1 Theory 2 Application and History 3 Accuracy problems 4 See also 5 References 6 Further reading 7 External links

Theory

Cost Benefit Analysis is typically used by governments to evaluate the desirability of a given intervention, it is an analysis of the cost effectiveness of different alternatives in order to see whether the benefits outweigh the costs. The aim is to gauge the efficiency of the intervention relative to the status quo. The costs and benefits of the impacts of an intervention are evaluated in terms of the public's willingness to pay for them (benefits) or willingness to pay to avoid them (costs). Inputs are typically measured in terms of opportunity costs - the value in their best alternative use. The guiding principle is to list all of the parties affected by an intervention, and place a monetary value of the effect it has on their welfare as it would be valued by them.

The process involves monetary value of initial and ongoing expenses vs. expected return. Constructing plausible measures of the costs and benefits of specific actions is often very difficult. In practice, analysts try to estimate costs and benefits either by using survey methods or by drawing inferences from market behaviour. For example, a product manager may compare manufacturing and marketing expenses to projected sales for a proposed product, and only decide to produce it if he expects the revenues to eventually recoup the costs. Cost-benefit analysis attempts to put all relevant costs and benefits on a common temporal footing. A discount rate is chosen, which is then used to compute all relevant future costs and benefits in present-value terms. Most commonly, the discount rate used for present-value calculations is an interest rate taken from financial markets (R.H. Frank 2000). This can be very controversial - for example, a high discount rate implies a very low value on the welfare of future generations, which may have a huge impact on the desirability of interventions to help the environment, and so on. Empirical studies have suggested that in reality, people's discount rates do decline over time. Because CBA aims to measure the public's true willingness to pay, this feature is typically built into studies.

During cost-benefit analysis, monetary values may also be assigned to less tangible effects such as the various risks which could contribute to partial or total project failure; loss of reputation, market penetration, long-term enterprise strategy alignments, etc. This is especially true when governments use the technique, for instance to decide whether to introduce business regulation, build a new road or offer a new drug on the state healthcare. In this case, a value must be put on human life or the environment, often causing great controversy. The cost-benefit principle says, for example, that we should install a guardrail on a dangerous stretch of mountain road if the dollar cost of doing so is less than the implicit dollar value of the injuries, deaths, and property damage thus prevented (R.H. Frank 2000).

Cost-benefit calculations typically involve using time value of money formula. This is usually done by converting the future expected streams of costs and benefits to a present value amount.

Application and History

Cost-benefit analysis is mainly, but not exclusively, used to assess the value for money of very large private and public sector projects. This is because such projects tend to include costs and benefits that are less amenable to being expressed in financial or monetary terms (e.g. environmental damage), as well as those that can be expressed in monetary terms. Private sector organizations tend to make much more use of other project appraisal techniques, such as rate of return, where feasible.

The practice of cost-benefit analysis differs between countries and between sectors (e.g. transport, health) within countries. Some of the main differences include the types of impacts that are included as costs and benefits within appraisals, the extent to which impacts are expressed in monetary terms and differences in discount rate between countries. Agencies across the world rely on a basic set of key cost-benefit indicators, including:

• PVB (present value of benefits);
• PVC (present value of costs);
• NPV (PVB less PVC);
• NPV/k (where k is the level of funds available) and
• BCR (benefit cost ratio, PVB divided by PVC).

The concept of CBA dates back to an 1848 article by Dupuit, and was formalized in subsequent works by Alfred Marshall. The practical application of CBA was initiated in the US by the Corps of Engineers, after the Federal Navigation Act of 1936 effectively required cost-benefit analysis for proposed federal waterway infrastructure. ^[1] The Flood Control Act of 1939 was instrumental in establishing CBA as Federal policy. It specified the standard that "the benefits to whomever they accrue [be] in excess of the estimated costs.^[2]

Subsequently, cost-benefit techniques were applied to the development of highway and motorway investments in the US and UK during the 1950s and 60s. An early, and often quoted, more developed application of the technique was made to London Underground's Victoria Line. Over the last 40 years, cost-benefit techniques have gradually developed to the extent that substantial guidance now exists on how transport projects should be appraised in many countries around the world.

In the UK, the New Approach to Appraisal (NATA) was introduced by the then Department for Transport, Environment and the Regions. This brought together cost-benefit results with those from detailed environmental impact assessments and presented them in a balanced way. NATA was first applied to national road schemes in the 1998 Roads Review, but subsequently rolled out to all modes of transport. It is now a cornerstone of transport appraisal in the UK and is maintained and developed by the Department for Transport.[10]

The EU's 'Developing Harmonised European Approaches for Transport Costing and Project Assessment' (HEATCO) project, part of its Sixth Framework Programme, has reviewed transport appraisal guidance across EU member states and found that significant differences exist between countries. HEATCO's aim is to develop guidelines to harmonise transport appraisal practice across the EU.[11][12] ^[3]

Transport Canada has also promoted the use of CBA for major transport investments since the issuance of its Guidebook in 1994.^[4]

More recent guidance has been provided by the US Dept. of Transportation and several state transportation departments, with discussion of available software tools for application of CBA in transportation, including HERS, BCA.Net, StatBenCost, CalBC, and TREDIS. Available guides are provided by the Federal Highway Administration^[5][6], Federal Aviation Administration^[7], Minnesota Department of Transportation^[8] and California Department of Transportation (Caltrans)^[9].

During the early 1960’s, CBA was also extended to assessment of the relative benefits and costs of health care and education in works by Burton Weisbrod.^[10][11] Later, the United States Department of Health and Human Services issued its CBA Guidebook.^[12]

Accuracy problems

The accuracy of the outcome of a cost-benefit analysis is dependent on how accurately costs and benefits have been estimated. A peer-reviewed study [13] of the accuracy of cost estimates in transportation infrastructure planning found that for rail projects actual costs turned out to be on average 44.7 percent higher than estimated costs, and for roads 20.4 percent higher (Flyvbjerg, Holm, and Buhl, 2002). For benefits, another peer-reviewed study [14] found that actual rail ridership was on average 51.4 percent lower than estimated ridership; for roads it was found that for half of all projects estimated traffic was wrong by more than 20 percent (Flyvbjerg, Holm, and Buhl, 2005). Comparative studies indicate that similar inaccuracies apply to fields other than transportation. These studies indicate that the outcomes of cost-benefit analyses should be treated with caution, because they may be highly inaccurate. In fact, inaccurate cost-benefit analyses may be argued to be a substantial risk in planning, because inaccuracies of the size documented are likely to lead to inefficient decisions, as defined by Pareto and Kaldor-Hicks efficiency ([15] Flyvbjerg, Bruzelius, and Rothengatter, 2003).

These outcomes (almost always tending to underestimation, unless significant new approaches are overlooked) are to be expected, since such estimates:

1. Rely heavily on past like projects (frequently differing markedly in function or size, and certainly in the skill levels of the team members),
2. Rely heavily on the project's members to identify (remember from their collective past experiences) the significant cost drivers,
3. Rely on very crude heuristics ('rules of thumb') to estimate the money cost of the intangible elements, and
4. Are unable to completely dispel the usually (unconscious) biases of the team members (who often have a vested interest in a decision to 'go ahead') and the natural psychological tendency to "think positive" (whatever that involves).

Another challenge to cost-benefit analysis comes from determining which costs should be included in an analysis (the significant cost drivers). This is often controversial as organizations or interest groups may feel that some costs should be included or excluded from a study.

In the case of the Ford Pinto (where, due to design flaws, the Pinto was liable to burst into flames in a rear-impact collision), the Ford company's decision was not to issue a recall. Ford's cost benefit analysis had estimated that: based on the number of cars in use and the probable accident rate, deaths due to the design flaw would run about $49.5 million (the amount Ford would pay out of court to settle wrongful death lawsuits). This was estimated to be less than the cost of issuing a recall ($137.5 million) [16]. In the event, Ford overlooked (or considered insignificant) the costs of the negative publicity so engendered, which turned out to be quite significant (since it led to the recall anyway and to measurable losses in sales).

In the field of Health Economics, some analysts feel that cost-benefit analysis can be an inadequate measure, as willingness-to-pay methods of determining the value of human life can be subject to bias according to income inequity. They support use of variants such as cost-utility analysis and quality-adjusted life year to analyze the effects of health policies.

See also

• Applied Information Economics
• Benefit shortfall
• Business case
• Cost overrun
• Financial analysis
• Kaldor-Hicks efficiency - economic principle underlying cost-benefit analysis
• Net present value - a similar type of calculation
• Optimism bias
• Parametric estimating - cost estimating methodology
• Pareto efficiency - alternative economic principle
• Reference class forecasting
• Risk-benefit analysis - in many decisions, such as in bio-medical research, the cost is replaced by risk.

References

1. ^ History of Benefit-Cost Analysis, Proceedings of the 2006 Cost Benefit Conference [1]
2. ^ Google book extract from Cases in Public Policy Analysis By George M. Guess, Paul G. Farnham
3. ^ Guide to Cost-Benefit Analysis of Investment Projects. Evaluation Unit, DG Regional Policy, European Commission, 2002. [2]
4. ^ Guide to Benefit-Cost Analysis in Transport Canada. Transport Canada. Economic Evaluation Branch, Transport Canada, Ottawa, 1994[3]
5. ^ US Federal Highway Administration: Economic Analysis Primer: Benefit-Cost Analysis 2003 [4]
6. ^ US Federal Highway Administration: Cost-Benefit Forecasting Toolbox for Highways, Circa 2001 [5]
7. ^ US Federal Aviation Administration: Airport Benefit-Cost Analysis Guidance, 1999[6]
8. ^ Minnesota Department of Transportation: Benefit Cost Analysis. MN DOT Office of Investment Management[7]
9. ^ California Department of Transportation: Benefit-Cost Analysis Guide for Transportation Planning[8]
10. ^ Weisbrod, Burton: “Does Better Health Pay?” Public Health Report, vol. 75, June 1960, pp. 557-60.
11. ^ Weisbrod, Burton: “Education and Investment in Human Capital,” Journal of Political Economy, Supplement, vol. 70, no. 5, part 2, October 1962, pp. 106-23 (reprinted in B. Kiker, ed., Investment in Human Capital, University of South Carolina, Columbia, SC, 1971; also R. Wykstra, ed., Human Capital Formation and Manpower Development, The Free Press, New York, 1971)
12. ^ US Department of Health And Human Services: Feasibility, Alternatives, And Cost/Benefit Analysis Guide, July 1993 [9]

Further reading

• Ascott, Elizabeth. 2006. Benefit Cost Analysis of Wonderworld Drive Overpass in San Marcos, Texas. Applied Research Project. [17], Texas State University
• Bent Flyvbjerg, Mette K. Skamris Holm, and Søren L. Buhl, "Underestimating Costs in Public Works Projects: Error or Lie?" Journal of the American Planning Association, vol. 68, no. 3, Summer 2002, pp. 279-295. [18]
• Bent Flyvbjerg, Mette K. Skamris Holm, and Søren L. Buhl, "How (In)accurate Are Demand Forecasts in Public Works Projects? The Case of Transportation." Journal of the American Planning Association, vol. 71, no. 2, Spring 2005, pp. 131-146. [19]
• Bent Flyvbjerg, Nils Bruzelius, and Werner Rothengatter, Megaprojects and Risk: An Anatomy of Ambition (Cambridge University Press, 2003). [20]
• Benefit/Cost Analysis: Introduction. Mankato State University. undated. [21]
• Chakravarty, Sukhamoy (1987). "cost-benefit analysis," The New Palgrave: A Dictionary of Economics, v. 1, pp. 687-90.
• Folland, Sherman, Allen C. Goodman and Miron Stano. The Economics of Heath and Health Care. Fifth ed. Pearson Prentice Hall: New Jersey, 2007. pg 83, 84.
• Portney, Paul R., Benefit-Cost Analysis, in The Library Of Economics and Liberty. [22]
• Tevfik F. Nas, Cost-Benefit Analysis: Theory and Application (Thousand Oaks, Ca.: Sage, 1996). [23]

External links

This article's external links may not follow Wikipedia's content policies or guidelines. Please improve this article by removing excessive or inappropriate external links.

• [24] - The Environmental Valuation & Cost-Benefit Website
• [25] - Environmental Valuation & Cost-Benefit News
• [26] - Caltrans Guide to Benefit-Cost Analysis
• [27] - Inaccuracy in cost estimates
• [28] - Inaccuracy in benefit estimates
• Decision Analysis in Health Care George Mason University online course offering lectures and tools for measuring cost-effectiveness in health care scenarios.
• Cost-Benefit Analysis on Clinfowiki
• Reports on cost-benefit analysis and the environment in Tropical countries

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