It uses a similar past project to estimate the duration or cost of your current project.
Thus the root of the word: analogy. It is considered a combination of historical information and expert judgment
It is the fastest technique to estimate cost but less accurate.
E.g if it cost $7,100 to develop a website a few months ago and you are responsible for developing a new similar website, you estimate it to cost $7,100.
It uses the relationship between variables to calculate the cost or duration. For example, in the previous project, cost of concreting per cubic meter was$100.
Then you can determine total cost of current similar project by using previous information.
It is more accurate than the analogous estimation.