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Social Cost-Benefit Analysis: History
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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.

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

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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