THEORIES AND APPROACHES REGARDING THE COST – BENEFIT ANALYSIS ROLE AND PRINCIPLES

Tatiana Mosteanu and Mihaela Iacob

Theoretical and Applied Economics, 2008, vol. 11(528)(supplement), issue 11(528)(supplement), 7-13

Abstract: Cost-benefit analysis, used for the first time by the French engineer Jules Dupuit, is a practical method for measuring costs and benefits of investment projects. Costs and benefits arise both today and the future, and for that reason, in order to be aggregated and brought into comparison, it is essential that all are expressed in a common measurement unit, money, and discounted at a certain moment in time. If aggregation and discounting are simple exercises of algebra, choosing the discounting rate and converting some non-monetary costs and benefits into monetary equivalent, such as the time saved or the human lives saved, represent complex calculations and intense analysis, making use of other academic fields.

Keywords: allocative efficiency; cost-benefit analysis; net present value; discount rate; intangible costs and benefits. (search for similar items in EconPapers)
Date: 2008
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