Costs and Cost-Effectiveness

Abstract

Measuring policy costs is no easy task, and the broader the scope of a policy, the more difficult it is to assess its cost. At first glance, costs could be regarded as ‘the monetary value of the resources’ devoted to a policy (Stokey and Zeckhauser, 1978: 151), but evaluating them usually entails a much more intricate exercise. In what follows, I shall not attempt to develop a full account of the concept of cost, which can be found in most introductory textbooks in microeconomics, public finance or policy analysis. However, a selection of some key dimensions of the concept of cost needs to be presented.