Cost-effectiveness Analysis for Public Policy Evaluation

Abstract

Human Capital theory is an economic concept which is referred to and applied for considering the output compared to the input. It is Cost-effectiveness Analysis. This concept  represents the relationship between higher investment that results in higher output and  consequently higher profit for the stakeholder. This can be understood because the higher output  can bring higher outcomes and higher composition to the enterprise. The key purpose of  Cost-effectiveness Analysis is to analyze the cash benefit in terms of worthiness evaluation. This  analysis is a method to study an effect on the existing resource, which is a decision procedure for selecting the best choice of ways of spending money. Thus, cost effectiveness is one factor in an employment, fairness creation, and requirement, which can be used in further decision processes. In conclusion, there are 2 benefits for public policy in the Cost-effectiveness Analysis procedure, namely 1) compare the benefit with other alternatives, and 2) select a benefit after selecting  alternatives. We may conclude that we can compare alternatives of cost and other benefits by considering the relationship with the initial objective. This also includes other relevant  provisions, laws, and regulations, including problem resolution, technology, and limitations, which are a barrier in decision making.