What Is an Economic Benefit?
In a very basic sense, an economic benefit is any sort of gain that is quantifiable in terms of money. A monetary award or pay increase is an example of an economic benefit on a personal level. Most of the time, economic benefits are discussed in terms of larger societal gains. Economists often use these numbers to benchmark the financial ramifications of different proposed government actions, community planning initiatives, or business reductions. More global benefits analysis is often good way of projecting societal growth or decline over time.
Understanding the potential economic benefit of certain actions or events is valuable in a number of arenas, from making laws to planning budgets and marketing strategies. Economic benefit is generally considered a variable, and is used as a target for projections and predictions. It is only rarely described in terms of hard and fast figures, and even then, only in terms of the past. The realized economic benefits of past actions are usually easier to quantify than are the expected benefits for things that have yet to happen.
Economic benefit is usually calculated as a factor of two things: a country or locality’s gross profits and individual earning potentials and expectations. Inflation, cost of living, and other fluctuations must usually also be taken into account. The main goal is to look at the financial outcomes of something over time.
Researchers and economists often project economic benefits as related to some new product or technology. Much of this is marketing-driven. Studies will attempt to show how the introduction of certain new products or ideas will spur growth in different sectors. If something is likely to create jobs or improve the financial standing of community members who may then go and spend that money, it can be said that the proposal carries a “positive” economic benefit. These sorts of studies are commonly used in fundraising and grant writing proposals, as well as in political lobbying.
Economic benefit may also be studied for sociological or anthropological purposes. Researchers in these fields may look to understand the financial ramifications of such things as getting a college education, having multiple children, or delaying retirement. Some of these studies are used to help lawmakers and community leaders anticipate the needs of their citizen bases. Others are created more as a means of benchmarking societal norms and their ramifications in terms of money and revenue.
Individuals may also engage in a smaller-scale, more personalized form of economic benefits analysis when it comes to potential life changes. Switching careers, for instance, or moving into a smaller house are likely to change a person’s net cash flow. Crunching the numbers ahead of time and coming to some understanding of what a change would mean in terms of finances is one way for individuals to decide whether the shift would be beneficial from an economic standpoint.
Discuss this Article
Post your comments