What are the different methodologies for cost-benefit analysis?

What are the different methodologies for cost-benefit analysis?

There are several methodologies for cost-benefit analysis, including the traditional approach, the social cost-benefit analysis, and the multi-criteria analysis. Each has its own strengths and weaknesses.

Can you explain the traditional approach in more detail?

Sure! The traditional approach focuses on quantifying costs and benefits in monetary terms, allowing for a straightforward comparison. It typically involves identifying all costs and benefits, discounting future values, and calculating the net present value.

What are the limitations of the social cost-benefit analysis?

The social cost-benefit analysis can be limited by difficulties in quantifying social benefits, potential biases in valuation, and challenges in accounting for externalities.

How does multi-criteria analysis differ from the other methods?

Multi-criteria analysis differs by evaluating multiple factors beyond just monetary values, allowing for a more comprehensive assessment of options based on various criteria.