Definition – A Cost Benefit Analysis (CBA) expresses a project’s or measure’s direct and indirect costs and benefits, allowing the benefits and economic viability to be assessed and expressed in monetary terms. It is undertaken by weighing the predicted monetised costs and benefits of the strategy, policy or measure for a set time scale. Cost benefit analysis can include the consideration of both internal and external costs and benefits. One of the main advantages of a CBA is the relative ease of communicating its results through one or more indicators. CBAs are most frequently applied to large-scale infrastructure projects. For non-infrastructure measures, most cities lack a standardised assessment approach.
Relevance to SUMP – The selection of measures should be guided by value for money as well as by the effectiveness of the measures. It is recommended that proposed measures are appraised with an eye to realistic and timely implementation, and that all costs and benefits are taken into account, not just those that can be easily measured or valued (see internal and external costs). In some instances, a full cost benefit analysis may be too costly and simpler approaches should be used especially for smaller measures.
Source: ITS Leeds KonSULT; Hüging et al., 2014