Benefit Cost Analysis
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Definition of benefit cost analysis
Assumptions
Data
Externalities
Evaluating nonmarket externalities
Discount rates
Free rider problem
Ranking projects
Conclusion

Benefit cost analysis (BCA) is a decision making tool used by all major international funding agencies to help decide how to allocate financial resources amongst competing project proposals.



This brief introduction to BCA provides a overview of the main components and indicates some of the limitations of using BCA to evaluate biological control projects.  It is important to understand the BCA process so that the results of the analysis can be questioned and/or defended. The important factors that need to be considered are listed on the left of the screen.


David Adamson