Cost-benefit analysis: cases and materials By Euston Quah and Raymond Toh, Routledge, London, 2011. 194 pp, ISBN 978-0-415-55880-8, £80.00 (hb)
Cost-benefit analysis (CBA) is the systematic and analytical process of comparing benefits and costs in evaluating the desirability of a project or programme, often of a social nature and for society as a whole. CBA is fundamental to government decision-making and is an effective tool for informed decisions on the use of society’s scarce resources. The main concepts and principles of cost-benefit analysis are highlighted in real life cases and applications. The cases are drawn from both physical and non-physical projects and infrastructure developments. Key concepts and principles of CBA are introduced. Pertinent issues are covered, such as the recent trend of using behavioural economics and common techniques in applied CBA. Case studies illustrate how CBA is done, with study questions for readers to ponder. The case studies include public sector policies and programmes covering widespread social policies as in health, education, social welfare and the environment. For each case, there are illustrations of the key concepts and principles of CBA used. Undertakings analysed include: the Three Gorges Dam in China, the 2008 Beijing Olympics, the Costs of Global Warming, and the Jamuna Bridge in Bangladesh. The case studies, many of which have taken or are to take place in developing countries provide a rich background to the principles of the method, and are accompanied by a wealth of explanatory material. As well as being suitable for courses in cost-benefit analysis, public finance, environmental and health economics, the book should be of interest to all public policy decision-makers and planners.