Cost‐Benefit Analysis and Public Library Budgets Available to Purchase

RECENT YEARS have witnessed the proliferation of applications of cost‐benefit analysis to public sector expenditure. Cost‐benefit analysis is a method of decision‐making which seeks to quantify the benefits that are obtainable from a given course of action, to express them in financial terms (or in terms of financial equivalents) and then to deduct the estimated social and financial costs so that the results of the course of action may be assessed, valued and expressed in monetary terms. Quantification of actual financial costs and benefits poses no difficulties, but it has been shown elsewhere that the quantification of social costs and benefits often poses considerable problems. Some social benefits, such as the value of time‐saving, can be quantified reasonably successfully (using, for example, financial equivalents of time saved in terms of average wages or average salaries of the individuals concerned), but others, such as the measurement of alleviation of suffering or the assessment of degrees of incapability in nursing care, have no adequate financial equivalents.