The document discusses cost benefit analysis and cost efficiency analysis. It defines cost benefit analysis as a method used to understand the costs and benefits of a project or investment in monetary terms, and determine if benefits outweigh costs. Cost efficiency analysis ensures maximum output with minimum costs. The document outlines the steps of a cost benefit analysis, advantages and disadvantages, and provides examples to compare cost benefit analysis and cost efficiency analysis.

1. ECONOMIC ANALYSIS
- Cost Benefit Analysis
- Cost Efficiency Analysis
Presented By:
Sujan Poudel
MPH 2nd Sem, Nobel College

2. Cost Benefit
Analysis
• Cost Benefit analysis is used when a company
wants to know the economic worth of a project
or some type of investment.
• This is accomplished by understanding the cost
of the project and investment and making a
comparison with benefits.
• Both the costs and benefits are expressed in
terms of a monetary value.
• When the benefit are greater than the costs the
investment or project is said to be worth
pursuing..
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3. “
Step 1: Brainstorm Cost and
Benefits
Step 2: Assign the monetary
value to the costs
Step 3: Assign the monetary
value to the benefits
Step 4: Compare cost and
benefits
Steps of CBA

4. Advantage of
CBA
1.
A cost-benefit
analysis simplifies
the complex
decisions in a
project.
2.
The analysis gives
clarity to
unpredictable
situations.
3. The cost-benefit
analysis removes
any emotional
element and helps
to overcome
biases
4.
Suitable for all
projects small or
large
5. The cost-benefit
analysis helps to
make a rational
decision by
looking at the
figures expressed
in the same units.
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5. Disadvantages of
CBA
1.
Potential
Inaccuracies in
Identifying and
Quantifying Costs
and Benefits
2.
Increased
Subjectivity for
Intangible Costs
and Benefits
3. Inaccurate
Calculations of
Present Value
Resulting in
Misleading
Analyses
4.
A Cost Benefit
Analysis Might
Turn in to a
Project Budget
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6. Cost Efficiency
Analysis
• The actual meaning of cost efficiency is minimum cost to
produce maximum output
• It ensure that profit are substantial enough by deciding the
best way to bring with the least amount of financial
investment.
• Mainly used by firms to measure the worth cost and benefit
of project investment.
• Cost efficiency are of two types:
• Cost benefit
• cost effectiveness
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7. Cost efficiency Vs Cost
Effectiveness
Cost Efficiency Analysis
 Output
 Cost Efficiency Analysis
compares the costs of a
program to the outputs it
achieved (e.g. cost per
latrine constructed, or
cost per parental
counseling),
Cost Effectiveness Analysis
 Outcome
 Cost Effectiveness
Analysis compares the
costs of a program to the
outcomes it achieved
(e.g. cost per diarrheal
incident avoided, cost per
reduction in intra-family
violence).
Related but not same in all
the circumstances
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8. Examples of CBA and CEA
Cost Benefits Analysis Cost Effective Analysis
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9. Summary
• Both Cost Benefit Analysis (CBA) and Cost Efficiency Analysis (CEA)
include health outcomes. However, CBA places a monetary value on
health outcomes so that both costs and benefits are in monetary units.
• CEA deals with performing or functioning in the best possible manner
with the least waste of money, time and effort.
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10. References
• https://www.jaggaer.com/blog/what-cost-
efficiency/#:~:text=Efficient%20(adj.),the%20best%20use%20of%20resource
s.
• https://www.projectmanager.com/blog/cost-benefit-analysis-for-projects-a-
step-by-step-guide
• https://www.cdc.gov/policy/polaris/economics/cost-effectiveness/index.html
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11. Thank you !!!
Sujan Poudel
poudelsujan15@gmail.com