“Lies, damned lies, and statistics” is what Benjamin Disraeli reportedly once said, according to Mark Twain and if one is to believe Wikipedia. A few months ago I wrote on some of the dirty little secrets in Cost Benefit Analysis: mixing nominal and real flows, counting employment as a benefit, ignoring externalities etc. So it’s refreshing (or is it?) that … [Read more...] about How (not) to lie with Cost Benefit Analysis
cost benefit analysis
White elephants
John Kay’s column in the Financial Times is always an interesting read. In one of his last columns (ungated here) he pungently questioned the pertinence and value of Cost Benefit Analysis. His point: if the London sewerage system had been subject to present-day Cost Benefit rules it would never had been built. The Thames would still be a fetid cesspool and leisure walkers, … [Read more...] about White elephants
Opportunity costs
One of the things you first learn in economics is the concept of opportunity cost, and it is probably one of the things you forget fastest. So it is useful to have it explained in layman’s terms: … [Read more...] about Opportunity costs
Cognition and cost-benefit analysis
More than ten years ago, Cass Sunstein wrote an article on how Cost Benefit analysis can be used to fight our cognitive biases and help unravel our misunderstanding of the facts. … [Read more...] about Cognition and cost-benefit analysis
Impact evaluation, cost effectiveness and cost benefit analysis: back to the future?
In the last decade, attention has increasingly been placed on measuring and establishing the causality of the impact that development projects or interventions – either privately or publicly funded - have on an outcome of interest. In many areas such as health, education and social protection there is an emerging consensus on how to estimate the causal impact of … [Read more...] about Impact evaluation, cost effectiveness and cost benefit analysis: back to the future?