What you need to know about cost-benefit analysis
- Cost-benefit analysis evaluates the costs of public programs relative to the benefits they achieve.
- Cost-benefit analysis supports evidence-based policymaking by identifying programs that can provide the greatest return on investment of limited dollars.
- While the use of cost-benefit analysis within government has been limited to date, a growing number of states and counties are now systematically employing the approach to examine their current spending. These governments are using the results to identify and direct resources to programs that can deliver a strong return on investment.