Why is Cost-Benefit Analysis so Controversial?
Posted: 24 Jan 2001
The cost-benefit principle says we should take those actions, and only those actions, whose benefits exceed their costs. For many, this principle's common-sensical ring makes it hard to imagine how anyone could disagree. Yet critics of cost-benefit analysis are both numerous and outspoken. Many of them argue that cost-benefit analysis is unacceptable as a matter of principle. I begin by noting why many find this argument largely unpersuasive. I then examine several conventions adopted by cost-benefit analysts that do appear to yield misleading prescriptions. Finally, I consider the possibility that the cost-benefit principle may itself suggest why we might not always want to employ cost-benefit analysis as the explicit rationale for our actions.
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