A benefit is the value or utility obtained from an activity, related to a specified time period or product. Benefits represent the positive gains, advantages, or improvements in wellbeing that result from economic activities, production processes, or the use of products and services.
Benefits can be divided into two distinct categories. The first is revenue, which represents the income generated from the sale of product outputs. This is the direct financial return that accrues to the economic actor conducting the activity. The second category comprises external benefits, which are positive externalities that create gains in human wellbeing for other economic actors or society at large without being captured in market transactions or prices. Examples of external benefits include improved public health from cleaner air, enhanced ecosystem services from sustainable land management, or increased knowledge from research and development activities.
The sum of revenue and external benefits constitutes the social benefit of an economic activity. Understanding the full scope of social benefits is essential for comprehensive sustainability assessment and cost-benefit analysis, as it reveals the total value created by activities beyond what is reflected in conventional economic accounting. This broader perspective supports more informed decision-making that accounts for both market and non-market contributions to human wellbeing.
