Cost-benefit analysis is a technical process in the guise of analysis.

COST-BENEFIT ANALYSIS IS A TECHNICAL PROCESS IN THE GUISE OF ANALYSIS.

How do you know if projects like the Auckland Rail Link or the Puhoi-Wellesford Highway are worth doing? Someone does a cost-benefit analysis. But as Jarrett Walker writes:

The problem with Cost/Benefit analysis is that it requires you to convert all the costs, and all the benefits, to the same currency. That means you must know, with imperial confidence, the cost in dollars of such things as:

  • each minute of each customer’s time
  • a particular ecosystem to be destroyed or preserved, which may involve various degrees of endangerment (of species, and of ecosystem types)
  • historic or cultural resources to be destroyed or relocated, or preserved.

Assigning dollar values to some of these things is ridiculous, and we should reject the idea that dollar value provides any kind of common denominator for valuation. Cost-benefit analysis is a simplistic model that gives only an impression of rigour and fairness.

Should communities talk about how to weigh competing values that are in conflict?  Or should they let those decisions be made inside a technical process in the guise of analysis?

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