Most benefits are known Cost–Benefit Analysis (CBA), Requires all costs and and can be quantified and to compare different options, benefits to be estimated, estimated supported by qualitative which may not be explanation. practicable in all cases. Most benefits cannot be Break Even Analysis (BEA), to Requires units of benefit to quantified, but can be establish how effective an be estimated. Does not estimated (for example, it option needs to be to offset allow the relative may not be possible to its costs. effectiveness of different Most costs, determine number of options to be compared. Provide supporting reasoning including the injuries avoided through and evidence to explain most important, the proposal, but the whether the proposal will are known and dollar cost of an injury likely deliver or exceed the can be quantified avoided is even’ point. and their value ‘break estimated Most benefits can be Considers only the least cost Cost Effectiveness Analysis quantified but cannot be way of achieving a given (CEA), to compare different estimated in monetary outcome, not whether the options and identify which (for example, the likely outcome itself is optimal. option delivers the outcome area of habitat preserved at lowest cost unit of ‘per by the proposal, may be outcome’. known but not the dollar value of the benefits of preserving that habitat). It is not possible to quantitatively estimate the Multi Criteria Analysis (MCA), Requires clearly defined effects of, many or most of the impacts of an to assign and aggregate criteria to be weighted option. scores to decision criteria and based on their relative compare across options. importance, and a credible However, you are able to define the objectives explanation of the allocation and relative importance, as a basis for Use transparent criteria and of scores to compare comparing options. weightings that are consistent different options. with the policy objectives. You are working with a complex proposal that Use the most rigorous tool involves a range of parts, each with different data available to compare within limitations and characteristics. choices, estimating overall costs and benefits to the extent feasible. The OCBR can support you by advising on: the level of quantification expected in your impact analysis methods for data collection, analysis and estimation the appropriate decision-making tool to use targeted use of expertise such as consultants, and scoping tenders to support and build on your qualitative analysis.
Most costs, including the most important, are known and can be quantified and their value estimated Most benefits are known and can be quantified and estimated Cost–Benefit Analysis (CBA), to compare different options, supported by qualitative explanation. Requires all costs and benefits to be estimated, which may not be practicable in all cases. Most benefits cannot be quantified, but can be estimated (for example, it may not be possible to determine number of injuries avoided through the proposal, but the dollar cost of an injury avoided is Break Even Analysis (BEA), to establish how effective an option needs to be to offset its costs. Provide supporting reasoning and evidence to explain whether the proposal will likely deliver or exceed the ‘break even’ point. Requires units of benefit to be estimated. Does not allow the relative effectiveness of different options to be compared. Most benefits can be quantified but cannot be estimated in monetary (for example, the likely area of habitat preserved by the proposal, may be known but not the dollar value of the benefits of preserving that habitat). Cost Effectiveness Analysis (CEA), to compare different options and identify which option delivers the outcome at lowest cost ‘per unit of outcome’. Considers only the least cost way of achieving a given outcome, not whether the outcome itself is optimal. It is not possible to quantitatively estimate the effects of, many or most of the impacts of an option. However, you are able to define the objectives and relative importance, as a basis for comparing options. Multi Criteria Analysis (MCA), to assign and aggregate scores to decision criteria and compare across options. Use transparent criteria and weightings that are consistent with the policy objectives. Requires clearly defined criteria to be weighted based on their relative importance, and a credible explanation of the allocation of scores to compare different options. You are working with a complex proposal that involves a range of parts, each with different data limitations and characteristics. Use the most rigorous tool available to compare within choices, estimating overall costs and benefits to the extent feasible. The OCBR can support you by advising on: the level of quantification expected in your impact analysis methods for data collection, analysis and estimation the appropriate decision-making tool to use targeted use of expertise such as consultants, and scoping tenders to support and build on your qualitative analysis.
Victorian-Guide-to-Regulation-WORD-final.docx