Valuing Impacts

the contribution of CBAx to improved policy practices

Abstract

Policymaking involves trade-offs to ensure the best possible use of limited resources. Identifying and measuring the impacts – for example, health gains – of different policy alternatives helps decision makers with these trade-offs, and is a key component of policy analysis. The New Zealand Treasury’s approach to cost-benefit analysis includes CBAx, which is a toolkit for estimating the societal value of alternative policy options. A 2018 review showed increased quality of costbenefit analysis in budget proposals following the introduction of CBAx. In this article, we provide some context to CBAx developments and share insights from agencies’ practical experiences. We focus on the perspective of policy advisors using CBAx to undertake cost-benefit analysis, and touch on the application of the results to decision making. We conclude by outlining potential developments and inviting colleagues to make use of the CBAx toolkit to enhance cost-benefit analysis practices to better value policy impacts for New Zealanders.