It is based on cost-benefit analysis. However, it is more comprehensive in that it looks at not only the total costs and total benefits for an individual project, but it also examines the total costs and benefits for all alternatives or combinations thereof and treats them on an "equal footing." These alternatives include not only construction projects but also demand reduction measures, such as road pricing, developing more walkable neighborhoods and promoting telecommuting.
Equal footing means that there is no discrimination against some alternatives based on political or ideological factors.
LCPM itself is generally more costly than cost-benefit analysis, because of the requirement to study objectively all potential alternatives. However, it can provide large savings to taxpayers because it will do a better job of selecting those projects which maximize benefits while minimizing costs.
There has been a trend towards making LCPM mandatory for regional transportation plans. For example, it has been required by Washington State law (RCW 47.80.030) for regional transportation plans since July 1, 1994.