Introduction – In the Beginning…
To be effective decision-makers, prospective economists require the development of an extensive toolkit to assess and evaluate choices. This book develops detailed foundational tools to assess and evaluate the costs and benefits associated with public or private decision-making through a cost-benefit analysis (CBA).
Nearly every business and various governing bodies require cost-benefit analysis to ensure the correct decisions are being made with the limited available resources. Whether these decisions relate to investment projects or to wider social policy, it is fundamental that the approach to the evaluation of these choices ensures the optimal outcome.
This book is intended to equip students with the conceptual, analytical, and critical thinking skills needed to undertake a cost-benefit analysis. Through the development of these skills, the reader should be able to evaluate policies and projects in real-world contexts.
Upon completing this book, students should be able to:
- Construct and interpret a cost-benefit analysis in a variety of real-world situations.
- Apply non-market valuation methods to correct market failures, including those of a social and/or intangible nature.
- Evaluate risk and uncertainty in decision-making within a cost-benefit analysis framework.
- Critically evaluate the ethical and social consequences of decision-making using cost-benefit analysis.
Front Page Image Credit: “Pencil bridge between stacks of books” by Horia Varlan is licensed under CC BY 2.0