Benefit-Cost Analysis

Benefit-Cost Analysis, also referred to as Cost-Benefit Analysis, is a systematic process for calculating and comparing benefits and costs of a project for two purposes:

  • to determine if it is a sound investment (justification/feasibility)
  • to see how it compares with alternate projects (ranking/priority assignment)

Benefit-Cost Analysis works by defining the project and any alternatives; then by identifying, measuring, and valuing the benefits and costs of each.

When should benefit-cost analysis be used?

This website leads users, step by step, through the process of benefit-cost analysis, explaining concepts, describing methodologies, and suggesting additional resources.

Topics 1 through 4 below guide the user through the analysis.

Topics 5 through 7 provide examples of benefit-cost analysis and references for further information.

Use the sidebar to navigate between these topics.

What You Will Find on This Website
  1. How to define the problem that the project addresses and set up the analysis
  2. How to measure and value benefits and costs of transportation projects
  3. Types of measures and calculation issues
  4. How to interpret and present the results of benefit-cost analysis
  5. Sample benefit-cost models and links to model sites
  6. Case studies of benefit-cost analyses for transportation projects
  7. Published guidance and references and other websites

All topics related to benefits and costs and their measurement methodologies are defined, then summarized, and then discussed in greater detail. For people wanting further detail, the site provides links and references.  

Acknowledgments

This website is maintained by volunteers affiliated with the Transportation Economics Committee of the Transportation Research Board (TRB).
 
It is based upon a site hosted by the California Department of Transportation Office of Transportation Economics.  The original site was created by the California Center for Innovative Transportation at the Institute of Transportation Studies at the University of California at Berkeley and the Planning, Economics and Finance Committee of the American Society of Civil Engineers.
 
The TRB Transportation Economics Committee welcomes input and edits from qualified individuals.  Please contact the Committee if you would like to offer comments and suggestions or collaborate on the website.
 
Additional acknowledgments can be found here.

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