Abstract

Cost effectiveness. Economics. This is an introduction, accessible to non-economists as well as to economists, to the practice of cost benifit analysis. It begins from a discussion of financial appraisal. The distinguishing features of cost benifit analysis are then introduced progressively. Practical examples are used whenever possible to aid the exposition. Economic theory is introduced only where it is immediately relevant to practice. Nonetheless the approach is firmly grounded in economic principles and considerable space is devoted to those ideas that are central to practical cost benefit analysis - shadow prices, consumers' surplus, and valuation of unmarked goods. The additional needs of economically trained readers are catered for by a number of appendices which relate the ideas expounded in the book to mainstream economic theory.