Cost Benefit Analysis (CBA) is the way an economist approaches a situation by determining the strength and weaknesses of alternatives with the ultimate goal of determining the option that provides the best way to get benefits while also persevering savings. This theory has evolved to help form US Policy and judicial decisions. There have been several public policies that have used CBA to help create policies regarding mental illness, college education, and chemical waste policies.
However, CBA does come with a few criticisms:
1) CBA could be used for political goals rather than the good of the people
2) It’s inherently anti-regulatory – the monetization of policy is inappropriate
3) The longer it takes to complete CBA impeded policy regulations
Judge Posner talks about how Cost Benefit Analysis is used in helping interpret the law when it comes to making decisions on cases. But his opinion is that most decisions cannot be made by simply applying a formula but come from a place of your own experience and temperament.