Cost Benefit Analysis
As public policy analysts, we are often presented with making decisions that are economically efficient – that is, how does one gain the most benefit for society, given limited resources? Economics provides the theoretical foundation of decision-making, but putting theory into practice is not always easy. Cost-benefit analysis (CBA) is an analytical tool used to determine the worth of a project, program, or policy. It identifies and attempts to quantify the costs and benefits of the project or program and provides decision-makers with manageable information to find the “best” outcome. CBA helps managers to answer questions such as: • Does the proposal provide a net benefit to the community as a whole? • Should the project/program/policy be undertaken? • Should the project/program be continued? • Which of the alternative projects should be undertaken? The course employs various economic and statistical techniques to answer these questions, condensed into a 6-week course.
Through a variety of activities, at the end of the course, the student should be able to:
- Understand the project or set of projects to be analyzed.
- Apply the analytic tools and techniques of CBA.
- Understand the limitations of CBA.
- Compare alternative projects/programs/policies with CBA.
- Communicate the results of CBA so that decisions can be made.
(90710 Applied Economic Analysis) and (90707 Statistical Reasoning or 90711 Statistical Reasoning with R)