What is the Purpose of Social Cost-Benefit Analysis?

The Netherlands Bureau for Economic Policy Analysis (CPB) and the Netherlands Environmental Assessment Agency (PBL) have produced a General Guide to Social Cost-Benefit Analysis (SCBA) that is applicable to a broad range of policy sectors (Romijn and Renes, 2013). ‘Expert fiches’ were drawn up for the guide at the request of the Ministry of Finance. Each fiche contains a concise summary of state-of-the-art knowledge from a broad knowledge base, upon which the CPB and PBL writing team was able to draw when developing the General Guide to SCBA.

This fiche looks at why SCBAs are important. To show this the fiche goes into the nature of and background to SCBA and compares it with other policy assessment methods. The question here in each case is: what is the current situation in the literature as regards knowledge, methods and best practice on social cost-benefit analysis? This involves examining not only the scientific literature but also the thinking in applications and policy documents.