Utilitarianism and cost-benefit analysis
Cost-benefit analysis (CBA) = the view that social policies should be arranged so as to maximize the ratio of benefits to costs, when all of the benefits and costs are measured in economic terms.
Assuming that all of the relevant benefits and costs can be measured in economic terms, CBA operationalizes utilitarianism.
Problems for cost-benefit analysis include:
- Shadow pricing, hypothetical markets, and "protest bids."
- It ignores the distribution of costs and benefits.
- The "magnifying effect" of individual wealth.
The first two of these parallel some standard objections to utilitarianism.