1 - Introduction and Summary
Published online by Cambridge University Press: 21 October 2026
Summary
This chapter is an overview of the whole book and its findings. First, we note the shortcomings of traditional cost benefit analysis (CBA) – that it has no way to value things that just happen to us, like losing a job, being sick or being robbed. We then show how non-monetary outcomes can be valued using the new science of wellbeing.
Wellbeing is measured by life satisfaction (0–10), which is shown to be a reliable and valid measure (with good ability to predict mortality). So, to measure the benefits of a policy, we measure its non-pecuniary effects in terms of life satisfaction. We then convert the change in life satisfaction into the equivalent amount of money (that would produce that change in life satisfaction). For each policy, we then compute the ratio of benefits to net cost. This is the method now used by the UK Treasury.
Information
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- Value for MoneyThe New Cost-Benefit Analysis Targeting Wellbeing, pp. 1 - 16Publisher: Cambridge University PressPrint publication year: 2026
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