THE USES AND LIMITATIONS OF COST BENEFIT ANALYSIS

The author suggests that in all the European countries, government intervention in the operation of the free market is increasing, either by direct state intervention or alternatively, by the formulation of rules restricting the freedom of both individuals and companies. Cost benefit analysis as an aid to decision making by government was introduced into Europe in the mid-sixties, and in this paper the author examines the potential benefits that cost benefit methods might achieve. Such benefits are considered to be of particular importance in the field of transport planning, and examples are quoted to indicate the importance of correct factual relationships between economist, administrator and politician. The reasons why the benefits that could be derived are not obtained is discussed, and it is suggested that most of the difficulties seem to stem from lack of research on two levels:- (a) basic research on the evaluation of intangibles "the human factors involved in the design and construction and use of roads and urban areas", and on obtaining a reasonable degree of concensus on the framework to be used in analysis. (b) practical use of methods with a view to obtaining the necessary interface with politicians and other decision-makers. A technical description of cost benefit analysis is given in an appendice. /TRRL/

  • Corporate Authors:

    Centre for Management Studies, (Oxford)

    Kennington Road
    Kennington, Oxford, Oxfordshire,   England 
  • Authors:
    • Frost, M J
  • Publication Date: 1976-3

Media Info

  • Features: References; Tables;
  • Pagination: 67 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00164184
  • Record Type: Publication
  • Source Agency: Transport and Road Research Laboratory (TRRL)
  • Report/Paper Numbers: Monograph
  • Files: ITRD, TRIS
  • Created Date: Jan 30 1978 12:00AM