benefit-cost analysis

{
  "id": "MLC-T-ENV-002995",
  "term": "benefit-cost analysis",
  "field": "Environment",
  "definition": "1. A formal quantitative and sometimes qualitative evaluation of the benefits to be derived from a decision or action compared to the costs incurred by implementing that decision or action. Benefits and costs may include both market values and nonmarket values.\n\n2. An economic method for assessing the benefits and costs of achieving alternative health-based standards at given levels of health protection.\n\n3. A comparison of total benefits to total costs, usually expressed in monetary terms, used to measure efficiency and evaluate alternatives. See also cost-effectiveness and avoided-cost.\n\n4. Series of decision tools for measuring the net gain or loss to society due to a certain policy or project.\n\n5. An economic method for assessing the benefits and costs of achieving alternative health-based standards at given levels of health protection. [Terms of Environment] [EPA 2005b]\n\n6. A BCA is an evaluation of the social benefits and social costs of a policy action. The social benefits of a policy are measured by society’s willingness-to-pay for the policy outcome. The social costs are measured by the opportunity costs of adopting the policy. BCA addresses the question of whether the benefits for those who gain from the action are sufficient to, in principle, compensate those burdened by costs such that everyone would be at least as well off as before the policy. The calculation of net benefits (benefits minus costs) answers this question and helps ascertain the economic efficiency of the policy. Where all benefits and costs can be quantified and expressed in monetary units, BCA provides decision makers with a clear indication of the most economically efficient alternative, that is, the alternative that generates the largest net benefits to society (ignoring distributional effects).\n\n7. A comparison of total benefits to total costs, usually expressed in monetary terms, used to measure efficiency and evaluate alternatives.",
  "abbreviation": "BCA",
  "subject": "General environmental",
  "references": [
    "Core Ecosystem Services Research Program Standard Lexicon",
    "Terms of Environment; EPA 2005b",
    "Water Conservation Plan Guidelines Glossary",
    "EPA Subject Matter Expert - Thurston",
    "Thesaurus of Terms Used in Microbial Risk Assessment",
    "Economic Analyses Glossary; Preparing Economic Analyses Glossary",
    "Water Conservation Glossary"
  ],
  "url": "https://mlchart.com/terminology/environment/benefit-cost-analysis/"
}