Cost benefit and cost-effectiveness analysis

=Cost-Benefit and Cost-Effectiveness Analysis= What are they? Cost-benefit and cost-effectiveness analysis are tools for assessing whether or not the costs of an activity can be justified by the outcomes and impacts. Cost-benefit analysis measures both inputs and outputs in monetary terms. Cost-effectiveness analysis estimates inputs in monetary terms and outcomes in non-monetary quantitative terms (such as improvements in student reading scores). What can we use them for? ADVANTAGES: overlooked at the design stage. DISADVANTAGES: results may be highly dependent on assumptions made. difficult to quantify. COST: Varies greatly, depending on scope of analysis and availability of data. SKILLS REQUIRED: The procedures used in both types of analyses are often highly technical. They require skill in economic analysis and availability of relevant economic and cost data. TIME REQUIRED: Varies greatly depending on scope of analysis and availability of data.
 * Informing decisions about the most efficient allocation of resources.
 * Identifying projects that offer the highest rate of return on investment.
 * Good quality approach for estimating the efficiency of programs and projects.
 * Makes explicit the economic assumptions that might otherwise remain implicit or
 * Useful for convincing policy-makers and funders that the benefits justify the activity.
 * Fairly technical, requiring adequate financial and human resources available.
 * Requisite data for cost-benefit calculations may not be available, and projected
 * Results must be interpreted with care, particularly in projects where benefits are