The existing cost-benefit methods addressed to the developing countries are based on the premises of a growth strategy or its variants. They are, therefore, unsuitable to evaluate projects in the context of a basic needs strategy. This thesis attempts to formulate a methodology suitable to analyse the impact of projects on basic needs fulfilment. A pre-requisite for the application of the methodology - basic needs analysis - is the identification of a basic needs basket and the corresponding basic needs income. Analysis of projects then involves the construction of a goods balance sheet and an income balance sheet. " The goods balance sheet highlights the effect of projects on the social stock of basic goods. Social value of inputs and outputs is derived from the market prices using goods-specific and use-specific conversion factors. The value of the conversion factors varies from 0 to 1, the extreme values representing luxuries and essentials respectively. ) , Product mix considerations are thus taken into account in the'goods balance sheet.; (The effects on basic needs income resulting from projects are measured by the income balance sheet. J -=ý Income changes above the basic needs level are given a social weight of 0, whereas changes at or below this level are attributed a weight of 1. Thus, income distributional considerations are directly incorporated into the analysis. Opportunity costs of funds and resources are based on the forgone basic needs benefits from their alternative uses. Aggregation of costs and benefits over time is carried out without resorting to discounting. At the final stage, the two balance sheets are aggregated using weights which reflect the relative priority given to the objectives of basic goods production and basic needs income generation. The usefulness of the methodology is demonstrated by applying it to a forest land use problem in the tropics.