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In Defence of Cost-Benefit Analysis

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  • Henry Ergas

Abstract

In this paper I compare cost-benefit analysis (CBA) to multi-criteria analysis (MCA). I review the nature of the two approaches and consider the criticisms that have been made of CBA. I conclude that these criticisms largely lack merit, and that even to the extent to which they are meritorious, they provide no justification for relying on MCA. I conclude by expressing my concerns about the growing role of MCA in Australian project appraisal, which is symptomatic of a broader move away from sound policy evaluation.

Suggested Citation

  • Henry Ergas, 2009. "In Defence of Cost-Benefit Analysis," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 16(3), pages 31-40.
    • Handle: RePEc:acb:agenda:v:16:y:2009:i:3:p:31-40
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    File URL: http://press-files.anu.edu.au/downloads/press/p88621/pdf/02.pdf
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    References listed on IDEAS

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    1. Hahn, Robert W. (ed.), 1996. "Risks, Costs, and Lives Saved: Getting Better Results from Regulation," OUP Catalogue, Oxford University Press, number 9780195211740.
    2. Henry Ergas, 2009. "Infrastructure Australia, A Report to the Council of Australian Governments," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 16(1), pages 79-82.
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