POLS 7170X Master’s Seminar Program/Policy Evaluation

1. POLS 7170XMaster’s SeminarProgram/Policy Evaluation Class 8 Brooklyn College-CUNY Shang E. Ha

2. Measuring Efficiency • Efficiency issues arise frequently in decision making about social interventions • A government agency is reviewing national disease control programs currently in operation. If additional funds are to be allocated to disease control, which programs would show the biggest payoffs per dollar of expenditure? • Evaluations in the criminal justice field have established the effectiveness of various alternative programs aimed at reducing recidivism. Which program is most cost-effective to the criminal justice system? Given the policy choices, how would altering the current pattern of expenditures maximize the efficiency of correctional alternatives?

3. Some Difficulties • In many evaluations, formal and complete efficiency analyses are either impractical or unwise • Efficiency analysis may be unnecessary if the efficacy of the program is either very minimal or extremely high (conducting an efficiency analysis makes sense primarily when a program is effective but not perfectly so) • The required technical procedures may call for methodological sophistication not available to the project’s staff • Political or moral controversies may result from placing economic values on particular input or outcome measures • Expressing the results of evaluation studies in efficiency terms may require selectively taking different costs and outcomes into account, depending on the perspectives and values of sponsors, stakeholders, targets, and evaluators (accounting perspectives)

4. Ex-Ante Efficiency Analysis • Some efficiency analyses are undertaken prospectively during the planning and design phase of an initiative • Ex ante efficiency analyses may be undertaken on the basis of a program’s anticipated costs and outcomes • Ex ante efficiency analyses for social programs are rarely undertaken • Ex ante efficiency analyses are most important for those programs that will be difficult to abandon once they have been put into place or that require extensive commitments in funding and time to be realized • E.g., increase ocean beach recreational facilities in New Jersey

5. Ex Post Efficiency Analysis Other efficiency analyses are undertaken retrospectively, after a program has been in place for a time and has been demonstrated to be effective by an impact evaluation (therefore, there is interest in making the program permanent or possibly expanding it)

6. Cost-benefit vs. cost-effectiveness • Cost-benefit analysis: the outcomes of programs are expressed in monetary terms • A shop-lifting prevention program, $2 are saved (e.g., cost of the program $8 vs. loss due to shop-lifting $10) • Cost-effectiveness analysis: the outcomes are expressed in substantive terms • A shop-lifting prevention program expends $50 to avert one single shop-lifting

7. Cost-benefit vs. cost-effectiveness • Because of the controversial nature of valuing outcomes, in many cases, especially regarding human services, cost-effectiveness analysis is seen as a more appropriate technique than cost-benefit analysis • Cost-effectiveness analysis requires monetizing only the program’s costs; its benefits are expressed in outcome units (from impact analysis) • Cost-effectiveness analysis can be useful in comparing the efficiency of different programs • E.g., alternative educational interventions may be compared by measuring the costs of each alternative of achieving a specific educational gain as measured by test scores

8. Cost-effectiveness analysis: An Example

9. Conducting Cost-Benefit Analysis • Assembling Cost Data • Agency fiscal records: salaries of program personnel, space rental, stipends paid to clients, supplies, maintenance costs, etc • Target cost estimates: imputed costs of time spent by clients in program activities, client transportation costs, etc • Cooperating agencies: costs from the cooperating agency (school, health clinic, etc)

10. Accounting Perspectives • What point of view should be the basis for specifying, measuring, and monetizing benefits and costs? (In short, costs to and benefits for whom?) • Thee accounting perspectives • Individual participants or targets • Program sponsors • The communal social unit involved in the program

11. Accounting Perspective • Individual-target accounting perspective • Takes the point of view of the units that are program targets, that is, the persons, groups, or organizations receiving the intervention or services • Program sponsor accounting perspective • Takes the point of view of the funding source in valuing benefits and specifying cost factors • Communal accounting perspective • Takes the point of view of the community or society as a whole, usually in terms of total income

12. Communal Accounting Perspective • Usually complicated • Taking the point of view of community as a whole implies that special efforts are being made to account for secondary effects, or externalities (indirect project effects) • E.g., the spillover of the training to relatives, neighbors, and friends of the participants • E.g., negative external effects of industrial and technical projects (pollution, noise, traffic, etc) • Also, communal costs for a project include opportunity costs, i.e., alternative investments forgone by the community to fund the project in question

13. Different Perspectives for a Hypothetical Employment Training Program

14. Cost-Benefit Analysis: An Example