Benefits and Costs

Yesterday’s post referred to “benefit-cost analysis” which is the same as what a lot of people call “cost-benefit analysis.” I chose this term for the reason anyone does anything. When I took ECON 605, the course was called “Benefit-Cost Evaluation.” Also, I took the course from Scott Farrow, who later suffered greatly as my advisor.

But he told it like this, during class. “Benefit-cost analysis” puts the fundamental equation of benefit-cost analysis right into the title. “Cost-benefit” gets it backwards. The field itself is pretty well split on the matter. The leading textbook, Cost-Benefit Analysis by Boardman, Greenberg, Vining, and Weimer uses one version of the name. But the main society for the field, Society of Benefit-Cost Analysis.

And the history of Google searches shows that most prefer “cost-benefit analysis” at around 8 to 1:

But I learned one way in grad school and like a lot of people who get into habits in grad school, I never left this one behind.

Image by DTR / Wikimedia.