Blog by Sumana Harihareswara, Changeset founder

01 Apr 2009, 0:49 a.m.

Cost-Benefit Analysis For Projects: Caution!

Hi, reader. I wrote this in 2009 and it's now more than five years old. So it may be very out of date; the world, and I, have changed a lot since I wrote it! I'm keeping this up for historical archive purposes, but the me of today may 100% disagree with what I said then. I rarely edit posts after publishing them, but if I do, I usually leave a note in italics to mark the edit and the reason. If this post is particularly offensive or breaches someone's privacy, please contact me.

We often say that something is/isn't "worth it" based on a reflexive guess. The important thing isn't quantifying all those guesses to the tenth decimal point, it's getting into the habit of interrogating them. How certain are you of the benefit & harm you're thinking of causing? Who, specifically, will benefit or hurt? Have you taken into account interest rates/inflation for long-term investments? And what's the opportunity cost? A CBA isn't an answer, just a tool for understanding the financial implications of a decision. But if you're overruling a financial decision with a cultural/ethical/positioning one, you should know you're doing it.

Tonight Stallman pointed out that twenty additional years of copyright monopoly, added onto the existing multi-decade duration, were basically nothing in a discounted-present-value calculation, and thus of zero benefit to a rational actor. Then again, as a repeated step in a "perpetual copyright on the installment plan" scheme...