kustannushyötyarvioon

Kustannushyötyarvio (KHA), often translated as cost-benefit analysis (CBA) in English, is a systematic process used to evaluate the desirability of a project or policy by comparing its expected costs to its expected benefits. The primary goal of a KHA is to determine whether the projected benefits of an undertaking outweigh its projected costs, thereby providing a rational basis for decision-making.

The process typically involves identifying all relevant costs, both direct and indirect, tangible and intangible, associated with the project. Similarly, all expected benefits are identified and quantified. Costs and benefits that occur at different points in time are usually discounted to their present value to account for the time value of money. This allows for a more accurate comparison of costs and benefits that are spread over the lifespan of the project.

Once costs and benefits are estimated and adjusted for time, they are often expressed in monetary terms. Various metrics can be used to present the results of a KHA, such as the net present value (NPV), benefit-cost ratio (BCR), or internal rate of return (IRR). A positive NPV or a BCR greater than one generally indicates that the project is economically viable.

KHA is widely used in various fields, including public policy, environmental management, infrastructure development, and business investment decisions. It helps decision-makers allocate scarce resources efficiently by prioritizing projects that offer the greatest net benefit. However, the accuracy of a KHA relies heavily on the quality of the data and assumptions used, and quantifying intangible costs and benefits can pose significant challenges.