Decision-making is a fundamental driver of change in society. We give our clients accurate, easy-to-understand insights into the costs and benefits involved in their project or policy, to allow them to make great decisions.

What is cost-benefit analysis?

Cost-benefit analysis (CBA) evaluates the financial and social benefits and costs associated with a new project or policy, to see if the benefits are greater than the costs over the life of the project or policy. A cost-benefit analysis may uncover environmental consequences of undertaking a certain project, or it can help quantify future demand for a product. It can even evaluate costs and benefits that are not traded in the marketplace and for which no market price is observable.

NineSquared’s approach to cost-benefit analysis

NineSquared has a structured collaborative approach to cost-benefit analysis. First, we work with the client to define the reference group (local, state or national), the analysis will apply to. Then we work with the client and other relevant stakeholders to clearly articulate the ‘without project’ base case before analysing and where possible quantifying the impact of the project.

The resulting analysis helps our clients build a business case that articulates the motivation and business need for the project, provides an assessment of the project’s economic, environmental and social benefits, feasibility and cost.

Our experience means we can provide clients with well researched, in-depth insights into the financial and social costs and benefits of setting a specific policy.

Cost-benefit analysis for projects

Cost-benefit analysis is a mandatory requirement for many infrastructure projects in the public and private sectors. Our evidence-based evaluations give decision-makers the confidence that their decisions will enhance community welfare.

We work with you and your team of advisors to ensure that all elements of your project scope and potential impacts are considered to measure both the immediate impacts and difficult-to-identify or measure impacts. We use published guidelines, academic literature, stakeholder engagement and data analysis to ensure all elements of a project are accurately assessed – both the good and the bad impacts.

Cost-benefit analysis for policy initiatives

Cost-benefit analysis can provide policymakers with insights and understanding about the social and financial impacts of potential policy initiatives. Rigorous analysis of the positive and negative impacts of policy proposals can improve the policy makers understanding of who the policy might affect and whether the proposal produces a net benefit for the community as a whole.

NineSquared’s public policy specialists and economic analysts can assist in applying cost benefit analysis to the evaluation of policies and initiatives as well as developing regulatory impact assessments and regulatory impact statements.

What questions can cost-benefit analysis solve?

Cost-benefit analysis is useful when considering whether or not a particular course of action will have an overall positive or negative economic impact on the community. CBA can provide vital, nuanced insights into complex questions such as:

  • Do the economic benefits outweigh the costs?
  • How can I select the highest value policy, program or project?
  • Which projects should I prioritise? Which of my competing priorities should be advanced, and which should be actioned first?
  • If I have a fixed budget cap, which combination of projects would generate the best return for the community?
  • What are the major drivers for the project?
  • What happens to my project if conditions change?
  • One of my projects improves safety, while the other improves efficiency – which helps most overall?

Download our guide to cost benefit analysis here

 

Recent Cost-Benefit Analysis Engagements