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Cost Benefit Analysis And Its Uses - School Essays

Cost Benefit Analysis And Its Uses

CBA and Injustice, section 10.5. The use of cost benefit analysis as a tool to determine public policy has many shortcomings we would prefer to avoid. The topic of this section is the lack of justice inherent to CBA and comparing it to other types of measuring systems.
The Pareto Criterion is based on the idea that a policy is acceptable if it benefits at least one person and harms no person. That is a nice idea but is far too strict to be useful in the real world. The article gives examples of just how impractical this criterion would be for us to use in any field. Any policy that would help millions but would somehow harm just one person is not justifiable using the Pareto ...

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a great amount and many others may loose a great amount as long as the result is a net gain.
CBA looks at the costs involved in the policy to determine if it is justifiable. This creates difficulties when we realize it creates a one vote per dollar scenario. This does not follow the ideas of democracy we seem to want to follow. When it becomes possible for people to buy the CBA justice cannot follow.
Unreliability: Shadow Prices and Discount Rates, 10.6. Another huge problem with CBA is the prices used in the study. It is very possible to accidentally, or intentionally, use fudged numbers, which drastically change the outcome of the CBA.
Prices may be excluded from the analysis, which were not anticipated or were purposely omitted due to biases of the people doing the analysis. The articles gave several examples, most were not needed but did show how drastic the outcome can be changed. To better understand how easy this would be just try to make a budget for yourself and ...

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Cost Benefit Analysis And Its Uses. (2008, July 11). Retrieved November 23, 2024, from http://www.essayworld.com/essays/Cost-Benefit-Analysis-And-Its-Uses/86619

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PAPER DETAILS

Added: 7/11/2008 01:22:33 PM
Category: Economics
Type: Free Paper
Words: 720
Pages: 3

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