totaløkonomi

Totaløkonomi is a Danish term describing an approach to evaluating the value and viability of an asset, project, or policy by considering all costs and benefits over its lifespan, rather than focusing solely on the upfront price. It is commonly equated with life-cycle costing (LCC) and with the broader concept of total cost of ownership (TCO).

The scope of totaløkonomi includes purchase price, financing costs, operating and maintenance expenses, energy use, depreciation, and disposal. It may also cover taxes, insurance, downtime, resale value, and, in some cases, environmental and social costs. Depending on the context, risk, reliability, and potential revenue streams from usage or performance can be incorporated as well.

Methodology typically involves defining objectives, setting system boundaries and a time horizon, identifying relevant cost and benefit items, estimating cash flows, selecting a discount rate, and calculating net present value or equivalent measures. Options are compared on a lifetime basis, and sensitivity analyses are used to test how results respond to key assumptions.

Applications are common in public procurement, infrastructure, real estate, energy, and equipment purchases, where long-term costs and benefits are important for decision-making. By revealing hidden or future costs, totaløkonomi supports more sustainable and economical choices.

Benefits include avoiding decisions driven by low upfront prices and aligning investments with long-term value. Limitations involve data intensity, uncertain future costs, and subjectivity in choosing cost items and discount rates. Totaløkonomi is often promoted by policy to improve procurement efficiency and sustainability.