THE DIFFERENCE BETWEEN COST BENEFIT ANALYSIS AND COST EFFECTIVENESS ANALYSIS

THE DIFFERENCE BETWEEN COST BENEFIT ANALYSIS AND COST EFFECTIVENESS ANALYSIS

Cost Benefit Analysis

? Formal cost-benefit analysis compares the monetary benefits and costs of government actions aimed at improving public well being. Such public sector action range from infrastructure improvements and education on the one hand to protection of environmental quality, human health, and safety, on the other. Cost Benefit Analysis is concerned with assessing all of the economic and social advantages (benefit) and disadvantages (costs) of a project and then quantifying these in monetary terms. To determine net social benefits is not necessary to place a monetary value only on tangible benefits but also on intangible benefit such as freedom from noise, peace of mind living in a safe environment and many more. The intangible benefits are the ‘outputs’ of many public sector activities.
? In cost-benefit analysis you look at all of the benefits and all of the costs on all m...