The authors contend that a cost-benefit analysis should be seen not as a mechanism for deciding mechanically on the allocation of funds and resources among programs but as a structure for weighing advantages and disadvantages (that is, for organizing knowledge). They report the economic benefit-cost analysis of a controlled experiment that used a traditional hospital-based treatment approach and a community-based alternative to mental hospital treatment. Considering all the forms of benefits and costs that they were able to derive in monetary terms, the experimental program provided both additional benefits and additional costs as compared with the conventional treatment. However, the added benefits, some $1,200 per patient per year, are nearly $400 more per patient per year than the added costs. A number of the forms of benefits and costs that the authors measured in quantitative but nonmonetary terms showed additional advantages of the community-based experimental program (authors).
Journal