(A Level) Cost–benefit analysis

Learning objectives

Explain how cost–benefit analysis uses private and external costs and benefits to appraise a project such as a road, dam or airport

Describe the stages of a cost–benefit study: listing costs and benefits, valuing them in money (including shadow prices) and comparing the totals

Calculate net social benefit from data and apply the rule that a project should go ahead when social benefits exceed social costs

Evaluate cost–benefit analysis, including the difficulty of valuing time, noise, health and life, deciding whose costs count and uncertainty about the future