Economics: CBA

Front

What is the B-C ratio in Cost-Benefit Analysis?

Back

The B-C ratio (Benefit-Cost ratio) is used to determine if a program's benefits outweigh its costs. A ratio greater than 1 indicates benefits exceed costs.

Front

What is a major disadvantage of conducting a Cost-Benefit Analysis (CBA)?

Back

A major disadvantage of CBA is the difficulty in assigning a monetary value to health outcomes, which can lead to inaccurate assessments.

Front

What is the most common alternative when identifying options for a CBA?

Back

The most common alternative is 'do nothing', which serves as a baseline for comparison.

Front

How is the wage rate estimated in economic evaluations?

Back

The wage rate is estimated from income data, reflecting the average earnings of individuals in a specific context.

Front

Calculate the daily wage rate given an average yearly income of $40,000 and 240 days worked per year.

Back

Daily wage rate = $40,000 / 240 = $167/day.

Front

What is the formula for calculating cost savings in a CBA?

Back

Cost savings = Average loss of productivity before intervention - Average loss of productivity after intervention.

Front

If the average loss of productivity before an asthma clinic is $3,340 and after is $1,169, what are the cost savings?

Back

Cost savings = $3,340 - $1,169 = $2,171.

Front

What does CBA stand for in economics?

Back

CBA stands for Cost-Benefit Analysis, a systematic approach to estimating the strengths and weaknesses of alternatives.

Front

Why is it important to conduct a Cost-Benefit Analysis?

Back

CBA is important to ensure that resources are allocated efficiently by comparing the expected costs and benefits of a project.

Front

What is the significance of a B-C ratio less than 1?

Back

A B-C ratio less than 1 indicates that the costs of a program outweigh the benefits, suggesting it may not be a worthwhile investment.