Economics: Cost Benefit Analysis

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This presentation is about Cost-Benefit Analysis (CBA).  It is an introduction for A Level students.  In particular for the AQA Examining Board: Unit 3.

The presentation provides an introduction and a safety-related example which could be used in a post 16 lesson.  It concludes with an evaluation of the technique.

Economics students should be able to evaluate the usefulness of Cost-Benefit Analysis as a technique.  Such evaluations should be balanced and provide points for and against.

Economics attempts to measure costs and benefits in monetary terms.  Therefore, it has an advantage over other subjects such as geography and politics which tend  not to measure costs and benefits explicitly.

The problem for economics occurs when it becomes over reliant on mathematical analysis.  Such quantitative scrutiny can become disconnected from the policy making process.  It should be acknowledged that CBA is only one possible input into decision-making.  There are other political or social inputs into policy which can be equally important.