Question

What is cost-benefit analysis of a public good? Why is it important? Why is it hard?

Answer 1

Cost Benefit Analysis is an analysis of the costs and benefits of delivering a public good to the society. Public goods are non-exclusive or rival goods.

Assessment of cost-benefit is used to estimate the total expense and benefits to society of a product or plan. It's critical because everybody's going to use public goods; it needs to be safe, useful and necessary.
Mainly because the government has to make sure that by finding out their views, the public goods are beneficial to everyone before they continue with the proposal. This is in itself a very important step.Public goods cost-benefit analysis has no price signals to consider when deciding whether the state should provide a public good and how much it should provide. Their findings on public project costs and benefits are rough approximations. Cost-benefit analysis on a public good is important because to see if it is and/or will be profitable in the future, it is a diagnosis on a public good. For example, take bottled water. .1% of the earth's water is fresh and clean, so the cost-benefit analysis will indicate to that bottled water corporation that the price of that water must be higher due to the scarcity of that commodity.

This compares the costs and benefits of delivering a public good to society, it's relevant because it asks us if we should provide the good. It's hard because there's no cost to determine the quality of the nice.