ABSTRACT
For interested readers there exist examples of the use of cost–benefit analysis (CBA) for planning the allocation of police resources, the organisation of refuse collection, the level of public transport services and the provision of rural water supplies. Examples of other areas of application would be local government fire and education services. This chapter emphasizes the practical difficulties of tracing external and linkage effects; of exactly measuring surpluses; of efficiency pricing when market prices are either inadequate measures of welfare impact or non-existent; of social pricing in regard to distributional considerations. At the methodological level, various reservations attach to the rules and postulates employed in CBA. First, apart from purely financial evaluation, the analysis was traditionally confined to consideration of aggregate efficiency matters. While considerable progress has been achieved in applying CBA to problems of urban and regional planning, scope for further development clearly exists.
