ABSTRACT
When the editors of this book asked me to contribute a chapter, they suggested the title ‘Cost assessments’. This provides me with the occasion to make an essential and perhaps surprising and somewhat paradoxical statement from the outset: economists are not particularly interested in costs, as such, or in primarily minimizing costs, as is often believed. An economic analysis, in the proper sense of the word, must also include an assessment of which desired outcomes (benefits) are obtained by incurring a certain cost. Economic assessments aim at determining the relation between the costs incurred and the benefits obtained, and a properly conducted economic analysis will give just as much importance to an accurate valuation of the benefits as to the estimation of costs.
