|F2F Volunteer Laila Salimi taught women|
farmers in Nueva Guinea, Nicaragua
how to perform a cost-benefit analysis.
Formal cost-benefit analyses are used in business decisions around the world and can be rather complex. The first part of a cost-benefit analysis is monetary and requires the ability to predict yields and calculate potential costs, revenues, losses, and profits. We have sent several F2F volunteers to the field to focus on this with our host organizations. F2F volunteers teach how to predict their yields using climate information services, how to keep records of their yields, costs, and revenues, and how to use that information to better predict how much a future decision could cost or benefit them.
Beyond the monetary part of a cost-benefit analysis, F2F volunteers stress the importance of considering the intangible costs and benefits that come with business decisions. This is the other part of a strong cost-benefit analysis: what non-monetary factors will affect the outcome of the decision? Some economists try to attach a monetary value to these factors.
|F2F Volunteer Carmen Pacheco-Borden with Ngabe-Bugle|
Women in Panama
In the case of the Ngabe-Bugle women in Panama, or when deciding whether to walk or take a cab, once all the information (monetary and non-monetary) is compiled and laid out, you can see the total cost and the total benefit of the decision at hand. Regardless of whether it is large or small, complex or simple, all decisions come down to the opportunity cost: “For each possible outcome, what do I have to give up to gain the possible benefit?” In the end, the benefit is only worthwhile if you are willing to give up what is necessary to achieve it.