Cost-benefit analysis (CBA) is a powerful evaluation method in which the total expected social costs of a project or policy are weighed against the total expected social benefits.

SEO regularly conducts complex social cost-benefit analyses (SCBAs), reviews CBAs from other organisations, and develops CBA guidelines for governments. Examples of areas in which SEO conducts CBAs include healthcare, infrastructure, and climate policy. A CBA makes visible whether the benefits of a new investment or policy outweigh the drawbacks, defined in terms of ‘general welfare’. The ambition is to also quantify non-monetary effects, such as effects on health and climate. Through this integrated approach, a CBA is an important instrument for making ex ante assessments of new policies or projects. SEO has extensive experience with applying the CBA method to various domains.

SUB-EXPERTISES

SEO has extensive expertise in conducting cost-benefit analyses in healthcare.

Examples include the costs and benefits of rehabilitation care, speech therapy, or occupational therapy. We also calculate the costs and benefits of new guidelines, for example regarding hospital care.

SEO is a renowned entity in this field and was asked by the Dutch government to draft the official Dutch guidelines for conducting cost-benefit analyses in the broader social domain. Since then, these guidelines have become mandatory for all cost-benefit analyses conducted for the Dutch central government.

What are the broad welfare effects of aviation policy?

In policy choices or investment decisions in aviation, there is often a trade-off between economic and other social interests. The effects of aviation on the climate and on the living environment (such as noise pollution) are the most prominent examples.

SEO has unique models to quantify the socio-economic effects of policy or business decisions in aviation. We model the behavioural responses of passengers and shippers and their social effects using our own NetCost and NetCargo models.

SEO also has extensive experience in the socio-economic effects of changes in airport capacity. We can also assess the effects at the individual flight level, thus gaining insight into the flights that are most important for a country. Additionally, we estimate the effects of flight taxes, climate taxes, and other policy measures.

What are the costs and benefits of achieving climate goals?

SEO is highly experienced in calculating the social costs and benefits of climate policy and ‘green’ investments. This includes both national and international climate mitigation and adaptation policies, as well as specific projects in the field of sustainable energy and the broader energy transition.

These questions may arise at the level of regions or specific markets. In addition, a social cost-benefit analysis is a suitable instrument to calculate the expected social welfare effects of achieving certain climate objectives.