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Cost–Benefit and Cost-Effectiveness Analyses

Both cost–benefit analysis (CBA) and cost-effectiveness analysis (CEA) are used to evaluate programs. CBA is used to compare a program’s costs with the dollar value of its benefits. CEA relates the cost of a program to its benefits but does not assign a dollar value to the benefits. This entry discusses how each analysis is performed and details some of the difficulties in estimating and calculating program costs and benefits.

Cost–Benefit Analysis

CBA, also called benefit–cost analysis, is a method used by economists to assess the efficiency of a policy or program. The goal of this type of analysis is to quantify all the impacts of a policy in monetary terms, so that they can be easily compared. If the benefits more than offset the costs ...

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