Methods explained: Cost-benefi t analysis

Methods explainedThe concept of cost-benefit analysis (CBA) originated in the UnitedStates in the 1930s where it was used to create a solution toproblems of water provision. The process arrived in the UK in the1960s for use in the transportation sector, where it was applied tothe construction of the M1 motorway and the Victoria Line on theLondon Underground. In recent years, CBA has found a new homein environmental policy, where there is increasing pressure to makeinformed policy decisions which take account of long-term costsand benefits. This article aims to explain the principles and methodsbehind CBA in a concise, introductory manner.