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Social Cost-Benefit Analysis: History
Please note this is an old version of this entry, which may differ significantly from the current revision.
Subjects: Economics

Economic and Environmental Valuation • 🟣 Economics and Econometrics • 🟡 Economics, Econometrics and Finance • 🔴 Social Sciences

  • social cost-benefit analysis
  • welfare economics
  • social welfare
  • economic valuation
  • environmental valuation
  • policy evaluation

Social cost-benefit analysis refers to an economic evaluation method that assesses the overall effects of policies, projects, or interventions on social welfare by comparing their total social costs and benefits . Unlike private financial analysis, which mainly considers direct costs and returns to specific organizations or individuals, social cost-benefit analysis incorporates broader impacts on society, including environmental effects, health outcomes, resource allocation, and distributional consequences [1]. The approach involves identifying relevant costs and benefits, estimating their values where possible, and comparing alternative options based on their contributions to overall social welfare [2]. Because many social and environmental impacts are not directly reflected in market prices, social cost-benefit analysis often applies economic valuation methods to estimate the value of non-market goods and services, such as ecosystem benefits, environmental quality, and public health improvements [1][2]. It is widely used in public policy, environmental economics, infrastructure planning, and regulatory evaluation to support decisions that consider both efficiency and broader societal impacts.

References

  1. Robert Mendelsohn; Sheila Olmstead; The Economic Valuation of Environmental Amenities and Disamenities: Methods and Applications. Annu. Rev. Environ. Resour. 2009, 34, 325-347, 10.1146/annurev-environ-011509-135201.
  2. Timo Kuosmanen; Mika Kortelainen; Valuing environmental factors in cost–benefit analysis using data envelopment analysis. Ecol. Econ. 2007, 62, 56-65, 10.1016/j.ecolecon.2007.01.004.
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