Kokonaiskustannushyötysuhde

Kokonaiskustannushyötysuhde, often abbreviated as KKH, is a Finnish term that translates to "total cost-benefit ratio" or "overall cost-effectiveness ratio." It is a metric used in economic analysis to evaluate the desirability of a project, investment, or policy by comparing its total costs to its total benefits. The fundamental principle is to determine if the overall gains from an undertaking outweigh its overall expenditures.

In practical application, kokonaiskustannushyötysuhde is calculated by dividing the total benefits by the total costs. A ratio greater than one suggests that the benefits exceed the costs, making the option potentially worthwhile. Conversely, a ratio less than one indicates that the costs are higher than the benefits, implying that the undertaking may not be economically sound. A ratio equal to one signifies a break-even point where costs and benefits are balanced.

The calculation of kokonaiskustannushyötysuhde involves identifying and quantifying all relevant costs and benefits, which can include both direct and indirect, tangible and intangible factors. This can be a complex process, as it often requires making assumptions and estimations, especially for intangible benefits like improved environmental quality or enhanced social welfare. The KKH analysis is a tool that aids decision-makers in prioritizing and selecting projects that offer the most value for the resources invested, contributing to more efficient allocation of public and private funds.