Question

Briefly compare the similarities and differences among CBA, CEA & CUA? Cost Benefit Analysis Cost Effective Analysis Cost Utility Analysis

Answer 1

Cost Benefit Analysis (CBA) is a systematic approach to estimate the strengths and weaknesses of the alternatives. CBA gives us a simple quantitative approach for deciding whether to go ahead with a decision. The following steps are used in CBA:

Step 1: Brainstorm costs and benefits

Step 2: Assign a monetary value to the costs

Step 3: Assign monetary value to the benefits

Step 4: Compare costs and benefits

Cost Effective Analysis (CEA) is a form of economic analysis that compares the relative costs and effects of different courses of action. CEA is distinct from CBA which assigns a monetary value to the measure of effect.CEA helps to identify ways to redirect resources to achieve more.

Cost Utility Analysis (CUA) is used to determine cost in terms of utilities, especially quantity and quality of life. CUA is a form of financial analysis used to guide procurement decisions. CUA is the only form of evaluation that addresses whether the benefits of an intervention exceed its cost. CUA is useful for evaluating and comparing programs that aim to reach the same goal in non-monetary terms.