A social cost-benefit analysis (MKBA) is an assessment method that makes the broader value of a project or policy choice visible and comparable. In regional policy, much of the value falls outside the market: health, nature, liveability and social cohesion. An MKBA brings those effects into the decision, alongside financial costs and benefits. For municipalities and regions, it is a practical instrument for making broad welfare measurable and for basing choices about areas, food, nature and mobility on the real value for society.
Why does regional policy need substantiation?
Regional challenges often involve effects that do not fit into a conventional business case: a healthier living environment, more biodiversity or stronger social cohesion. Without weighing those effects, investments can appear more expensive than they actually are for society. An evidence-based assessment prevents valuable initiatives from being rejected because the calculation is too narrow.
What does an MKBA add?
A social cost-benefit analysis (MKBA) maps all costs and benefits of a project or policy choice, including effects without a market price such as environment, health and liveability, and compares them with a reference scenario. This shows whether a choice adds net welfare for the region as a whole.
How does an MKBA connect to broad welfare?
The MKBA is a suitable instrument for making broad welfare operational. It translates a broad welfare concept into an evidence-based assessment that can count in decision-making and financing. This shifts policy steering from costs alone to actual quality of life and living environment.
How does an MKBA work in practice?
In practice, an MKBA often shows that societal benefits are larger than they first appear. One example is the project why the MKBA underlines the necessity of food initiatives, where the broader value of food policy was made evidence-based and visible. More context is available under MKBA for regions.
How does New Economy approach this?
New Economy carries out MKBA work on a data-driven basis, using sources such as CO2 data and eco-costs, and translates outcomes into concrete decisions and strategy. This makes societal value a firm part of the regional assessment. See solutions by challenge.
Frequently asked questions about MKBA in regional policy
Because much of the value of regional policy falls outside the market. An MKBA makes effects such as health, nature and liveability visible and substantiates the decision.
A business case looks at financial costs and benefits for one party. An MKBA broadens the analysis to society as a whole and includes non-financial effects.
An MKBA translates broad welfare into a structured assessment in euros, so policy can be steered by quality of life and living environment, not only by direct costs.
Relevant challenges include area development, food and nature initiatives, mobility and climate policy, especially where much of the value falls outside the market.
For evidence-based regional policy choices, see MKBA for regions or Municipal strategy and vision, or contact New Economy to explore the options.