How to determine cost/benefit of adding an index?
Index usage depends on the structure of you data and the selectivity of you data. If you make queries that you don't use them they are expensive. If you use them effectively they are great tool. There is a query planner and query planner analytics(EXPLAIN) of just planning or planning and executuion of commands (EXPLAIN ANALYZE). 

And there is a great online book: use the index luke about recommended usage of indexes