Milestone map
Milestone map
3 milestones
Identify policy options and define the CBA framework
4 weeks
Select a real documented policy question where multiple options are under genuine consideration — an infrastructure investment, a public health intervention, an environmental regulation, or a social programme — from a government consultation document, a published policy review, or a think-tank policy paper. Define the cost-benefit analysis framework: the scope of the analysis (whose costs and benefits are included), the time horizon, the discount rate and its justification, and at least three policy options to compare including a 'do nothing' baseline.
Proof required
CBA framework document (500+ words) identifying the real policy question with its source, defining the scope (whose costs/benefits included), time horizon, discount rate with justification, and at least three policy options including a do-nothing baseline.
What gets checked
- Policy question is from a real documented source — not invented
- Discount rate is stated with a specific justification — not just 'I used 3.5%'
- At least three options including a do-nothing baseline are defined with enough specificity to be costed
Common mistakes
- Omitting a do-nothing baseline — CBA only makes sense relative to what would happen without the policy intervention
- Not justifying the discount rate — the discount rate has a large effect on the NPV of long-term policies and must be justified, not assumed
- Setting scope too narrowly — a CBA that excludes externalities (environmental, health, distributional) often misses the most important costs
Resources
Foundationstart here
What a verifier looks for
- Confirm the policy question is from a real documented source — request the citation
- Review the discount rate — confirm it is stated with a specific justification
- Check the options list — confirm a do-nothing baseline is included
Quantify costs and benefits and calculate net present values
5 weeks
Populate the CBA framework with real quantified estimates: direct costs (capital, operating, administrative), direct benefits (time savings, health outcomes, productivity), and where possible, monetised externalities (environmental, social). Calculate the Net Present Value (NPV) and Benefit-Cost Ratio (BCR) for each option using the defined discount rate. Document all assumptions explicitly and perform a sensitivity analysis on the two or three most influential assumptions.
Proof required
CBA spreadsheet (or equivalent table) with NPVs and BCRs for all options, plus a written analysis (400+ words) documenting key assumptions, data sources for monetised values, and sensitivity analysis showing how conclusions change under alternative assumptions.
What gets checked
- NPV and BCR are calculated for all options using the defined discount rate — not just for the preferred option
- All monetised values have stated data sources — not assumed without citation
- Sensitivity analysis tests at least two assumptions and documents whether the ranking of options changes
Common mistakes
- Monetising costs but not benefits (or vice versa) — a CBA with asymmetric monetisation systematically biases the result
- Not citing sources for monetised externality values — shadow prices and value of statistical life estimates vary substantially by source
- Sensitivity analysis that only changes values by ±1% — realistic sensitivity analysis should test assumptions at their plausible extremes, not small perturbations
Resources
What a verifier looks for
- Review the spreadsheet — confirm NPV and BCR are calculated for all options, not just the preferred one
- Check monetised values — confirm each has a stated data source
- Review sensitivity analysis — confirm it tests at least two assumptions at plausible extremes
Defend CBA methodology and conclusions under economist or policy practitioner challenge
1 week
Present the CBA to an economist or senior policy analyst for a Q&A challenge. The reviewer must probe specific methodology decisions — 'your discount rate — why not use the social discount rate?', 'you've treated this cost as certain but it has significant variance — why?', 'your sensitivity analysis shows the ranking flips under alternative assumptions — why do you still recommend option B?'. Document the challenges and your responses. This Q&A satisfies the ADVERSARIAL VERIFICATION RULE for social-* outcomes.
Proof required
Q&A notes (250+ words) documenting the reviewer's credentials (economist or senior policy analyst), at least three specific methodology challenges, your responses, and any assumption changes or analysis updates committed to based on the session.
What gets checked
- Reviewer is an economist or senior policy analyst with CBA or policy evaluation experience
- At least three specific methodology challenges are documented — not general approval
- At least one assumption or analysis update is committed to based on the session
Common mistakes
- Choosing a reviewer who approves the structure without engaging with the specific assumptions
- Not being able to explain a monetised value under challenge — 'I found it online' is not a sufficient answer for a CBA assumption
- Not revising anything after the Q&A — in a well-conducted adversarial session, at least one assumption will need updating
Resources
What a verifier looks for
- Confirm reviewer credentials — economist or senior policy analyst with CBA or evaluation experience
- Review Q&A notes — confirm at least three specific methodology challenges are documented
- Check that at least one assumption or analysis update is documented based on the session
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