CBA is a process by which expected costs are weighed against expected benefits to determine whether the course of action is profitable. In CBA, both the costs and the benefits are defined in monetary terms.
In the context of social interventions, the technique adds up the value of the benefits of an intervention, and subtracts the costs associated with it. In its simple form, cost-benefit analysis is carried out using only financial costs and financial benefits. A more sophisticated approach to cost-benefit measurement models puts a financial value on intangible costs and benefits. For example, a cost-benefit analysis of a smoking reduction would transform a quitter’s improved health or longer life into a monetary value.