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Cost-Benefit Analysis

Cost-Benefit Analysis


A systematic approach to estimating the strengths and weaknesses of alternatives that satisfy transactions, activities or functional requirements.


The theory of cost-benefit analyses traces back to welfare economics of the 19th century, and the practice of these analyses started most prominently in the 1930s in the US when applied to government flood control regulations (source).

Everyday Use

One of the thoroughly economics-minded concepts that plays a significant part in our daily decision-making, whether we are conscious of it or not. Looking at decisions and circumstances through a lens of cost-benefits allows us to balance the influence of seen versus unseen, and to understand the bigger picture of those inflections.