CostBenefit Analysis

This module covers the fundamental notions of cost-benefit analysis; a method of evaluating the relative merits of alternative public investment projects or programmes in order to achieve economic efficiency in the allocation of scarce resources. In a way, cost-benefit analysis identifies and assesses the factors which need to be considered in making rational economic choices. In addition to understanding the theory and applying the principles behind cost-benefit analysis, some further complementary techniques drawn from decision sciences will be taught. The welfare foundations of cost-benefit analysis will be emphasized throughout the module. Topics covered will include identification and measurement of benefits and costs; investment decision criteria; risk and uncertainty; problems of distribution and equity; and particular problems in project evaluation.