Incremental Costs

Incremental costs refer to the additional expenses that arise from choosing one option over another in a decision-making process. In the context of Cost Benefit Analysis, these costs help assess the financial impact of a specific choice, such as implementing a new project or policy. They include all extra costs incurred—like materials, labor, and maintenance—associated with the decision. By comparing these incremental costs to the expected benefits, decision-makers can determine whether the option is worthwhile and make informed choices that maximize overall value.