Benefit-Cost Analysis

Benefit-Cost Analysis, also referred to as Cost-Benefit Analysis, is a systematic process for calculating and comparing benefits and costs of a project for two purposes:

    • to determine if it is a sound investment (justification/feasibility)

    • to see how it compares with alternate projects (ranking/priority assignment)

Benefit-Cost Analysis works by defining the project and any alternatives; then by identifying, measuring, and valuing the benefits and costs of each.

When should benefit-cost analysis be used?

This website leads users, step by step, through the process of benefit-cost analysis, explaining concepts, describing methodologies, and suggesting additional resources.

Topics 1 through 4 below guide the user through the analysis. Topics 5 through 7 provide examples of benefit-cost analysis and references for further information.

What You Will Find on This Website

All topics related to benefits and costs and their measurement methodologies are defined, then summarized, and then discussed in greater detail. For people wanting further detail, the site provides links and references.


This website is maintained by volunteers affiliated with the Economics and Finance Committee of the Transportation Research Board (TRB). It is based upon a site hosted by the California Department of Transportation Office of Transportation Economics. Additional acknowledgments can be found here.

The TRB Transportation Economics Committee welcomes input and edits from qualified individuals. Please contact Kyle Schroeckenthaler if you would like to offer comments and suggestions or collaborate on the website.

Copyright Permission

Use Permission

Some material contained here may be copyrighted, and this website does not modify any underlying copyright status. Permission is granted to copy, distribute, display and/or modify the material included here, but only for classroom and non-commercial purposes. Permission is given with the understanding that none of the material will be used to imply TRB or FHWA endorsement of a particular product, method, or practice. Those copying, distributing, displaying or modifying the material in this document for classroom use will give appropriate acknowledgment of the source of any material. For other uses of the material, individuals must request permission from the copyright holder or from the Committee, as appropriate.

Rights Contributors Grant With Respect To Their Submissions

The Committee welcomes your comments. However, if you are not prepared to have your contributions redistributed or edited, then do not submit to this site. You grant to the Committee and any third party a license to copy, distribute, display and/or modify any submissions you provide here consistent with the terms described above. You also certify that you prepared any contributions yourself, or copied it from a public domain or similar unrestricted resource. DO NOT SUBMIT COPYRIGHTED WORK WITHOUT FIRST OBTAINING PERMISSION. THE COMMITTEE RESERVES THE RIGHT TO REMOVE ANY MATERIAL DEEMED INFRINGING OR POTENTIALLY INFRINGING.

Disclaimer: Any opinions, findings, or conclusions expressed on this website are those of the authors and do not necessarily reflect the views of the Transportation Research Board or The National Academies. The material displayed here is provided as a public service and is presented “AS IS” and without warranty of any kind. The Committee neither reviews nor endorses any submissions to this site.