Cost benefit analysis

Cost Benefit Analysis (CBA) is used widely to inform decisions that yield positive, and enduring outcomes. ACIL Allen has extensive experience conducting CBAs for Federal, State and Territory Government agencies, and private sector and not-for-profit organisations, as well across a broad range of sectors.

CBA adopts a methodical approach to identifying and expressing, in monetary terms, the benefits and costs created by an option (or options) to defined groups, and to combine the impacts into a measure of net benefit and benefit-cost ratio. If the total benefits exceed total costs, implementation of the option will be an economically efficient use of resources. 

CBA is a favoured evaluation tool for a range of decision-makers in government and non-government sectors for several reasons. Firstly, CBA can be scaled depending on the scope of the project, from rapid analysis for small programs to comprehensive studies for major infrastructure projects. CBA is also versatile and can be applied within and across a range of sectors, including Health, Transport, Justice, Housing, Energy and Education. Lastly, CBA is widely recognised and endorsed by central funding agencies (many of whom maintain CBA guidelines) as an approach to support project selection, prioritisation and justification.

A similar type of analysis that is increasingly being sought by organisations working in community and social services sector is the Social Return in Investment (SROI) Study, which also seeks to compare the cost and benefit impacts of a program to demonstrate its net impact.