cost-benefit analysis

(redirected from Economic calculation)
Also found in: Dictionary, Thesaurus, Medical, Financial.

Cost-benefit analysis

A method of evaluating projects or investments by comparing the present value or annual value of expected benefits to costs; the practical embodiment of discounted cash flow analysis; a useful technique for making transparent the benefits of upfront investments in sustainable design features or technologies.

cost-benefit analysis

a technique for appraising the total economic costs and benefits (and ideally the total social costs and benefits expressed as economic costs) arising from any economic and social activity, especially new projects. Hitherto, the technique has been mainly used to appraise new, large, public projects. But, in an increasingly ecologically conscious era, the proposal now is that many more existing economic and social activities should be subject to full cost-benefit analysis, with many more costs, e.g. environmental, also included to a fuller extent than previously Cost-benefit analysis is far from being a straightforward technique, however, and much depends on the assumptions on which a costing is made. Careful attention has always to be given to the range of external costs and the range of benefits to be included in the calculations, as well as to the basis on which these can be costed. The results usually leave scope for controversy.

cost-benefit analysis

An analysis of a construction contract with the objective of identifying all the included costs and evaluating their benefits.
References in periodicals archive ?
Some economists attempted to bridge the gap between conventional economic calculation and the religious inspiration for protecting ANWR by developing a new economic concept of "existence value.
Section III A discusses the limited knowledge of development planners and examines the problem of economic calculation in implementing top-down development programs.
Ludwig von Mises and Irving Fisher advocate the present value approach to economic calculation.
Economic calculation does not require monetary stability in the sense in which this term is used by champions of the stabilization movement.
My article complements the existing literature on economic development and American Indians by emphasizing the role of economic calculation (Mises [1922] 1981, [1920] 1990; Hayek 1935) and the political economy of bureaucracy (Tullock 1965; Niskanen 1971) in explaining the failure of state-led development efforts.
These propositions are: individual choice is the foundation of economic analysis, the study of the market order is fundamentally about exchange behavior and the institutions where exchanges take place, the "facts" of the social sciences are what people believe and think, utility and costs are subjective; the price system economizes on the information that people need to process in making decisions, private property in the means of production is a necessary condition for rational economic calculation, the competitive market is a process of entrepreneurial activity, money is nonneutral by nature, capital structures consist of heterogeneous goods that have multispecific uses that must be aligned, and social institutions are often the result of human action as opposed to human design.
Two Forgotten Articles by Ludwig von Mises on the Rationality of Socialist Economic Calculation.
Mises dethroned socialism as a policy ideal in 1920, when he showed that economic calculation is impossible in the socialist commonwealth.
In other words, it was emphasised that water management needed to be analysed beyond the simple frameworks of neoclassical economic calculation, which, in large measure, continues to inform and shape most bureaucratic and technoscientific hydraulic practices.
The economic calculation of EV consumers then changes; their upfront investment does not include the cost of the battery, which, according to some sources, can account for half the purchase price of the vehicle.
It would be unrealistic to pretend that every now and then someone isn't going to made an economic calculation, but what's kindest always has been and, every fan of this sport would agree, always ought to be the overriding consideration.
The McLeod Commission was relatively unconcerned with questions of the impact of taxation rates on investment, observing that these were largely matters of political culture rather than subject to any precise economic calculation.

Full browser ?