Principles of Cost Benefit Analysis

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This course introduces the principles of cost benefit analysis and provides a clear structure for conducting or evaluating a cost benefit analysis.

The course begins by discussing what cost benefit analysis can be used for, in what kinds of situations it has been used in real life, and why it is preferred to some other methods for analysing whether a project should be implemented or not. It then moves on to introduce 10 steps for conducting a cost benefit analysis, and explains these steps carefully one by one. Examples and references to real life are provided throughout the course. Additionally, throughout the steps one particular example is followed through to provide some flesh to the story. After the steps, the course also discusses some shortcomings of the method and the importance of making policy recommendations after the analysis.

After the course the student should have a clear overview of cost benefit analysis and its possibilities, but also be aware of the shortcomings of the method. The student knows the structure or the cost benefit analysis and can use the structure to conduct their own analysis or evaluate an existing one.

Instructors: Jaakko Heikkilä

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