The following table, put an X in the column for CEA

1) In the following table, put an “X” in the column for CEA (cost-effectiveness analysis) and/or CBA (cost-benefit analysis) next to each statement that applies.

CEA CBA Feature

Helps regulators determine whether or not to do a project

Typically involves discounting of future economic effects

Helps policy-makers choose among options or among alternative ways of achieving a goal.

Results are often given as “multipliers” that tell regulators how many jobs a policy will create.

Reveals the Pareto-optimal level of an externality

Takes uncertainty about the magnitude of effects into account

Focuses on the effect of a policy change on low-income communities

Tries to get the “biggest bang for the buck” (achieves a goal at the least cost or greatest net benefit)

May entail calculating the internal rate of return