The Illusion of Certainty

Cost-benefit analysis can reduce complex public choices to a single number, ratio or preferred option. That discipline is useful, but it can make decisions seem more certain than they are.

This talk looks beneath the result, asking how much confidence decision-makers should place in it and how assumptions about the problem, counterfactual, forecasts, distribution, discounting and uncertainty affect its interpretation and use.

Designed for public servants with some familiarity with CBA, the session offers practical questions for testing robustness, recognising overstated confidence and making assumptions, trade-offs and judgement more visible. The aim is not to distrust CBA, but to use it more intelligently before advising on significant public decisions.