AEA365 | A Tip-a-Day by and for Evaluators

Jun/16

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Sarah Singer on The Value of Cost Analysis in Program Evaluation

Hi, I’m Sarah Singer, Research Associate at Hezel Associates in Syracuse, NY. I am not an expert in cost analysis by a long shot, but have become increasingly aware of its potential as a component of a program evaluation, particularly for education programs. My post today offers my reflections and some things to consider, from one novice to another, to help you approach cost analysis.

My colleague Caitlin Griffin and I facilitated a discussion at Evaluation 2015 about the barriers to cost analysis in education evaluation, which include a lack of training, difficulty in quantifying educational outcomes, and a lack of perceived need from program implementers. These challenges not only hinder evaluators from being able to perform cost analyses, but may prevent us from collectively asking the right questions in order to understand if and when we should do them. Before we, as evaluators, tackle the logistics of how to do cost analysis, we need to ask ourselves if we can (and want to) convince our clients that it’s useful to them, taking into account the context and timing of each program.

Lesson Learned: I am of the opinion that cost analysis is a valuable tool for us to have in our bag of tricks. A hard look at the real costs of a program, as they relate to the outcomes, can be revealing in ways that can inform even better decision-making than if only outcomes were measured. Armed with real cost findings, a program implementer can understand the full resource requirements for a program; pursue the most cost effective program improvements; and describe a program’s impacts as they relate to cost, which is a language that policy-makers speak.

Rad Resource: For some inspiration and to see cost analysis in evaluation in action, check out the Robin Hood Foundation, located in NYC, whose aim is to fight poverty. Their approach to metrics emphasizes a commitment to funding the most impactful AND financially sound programs.

Rad Resources: The CBCSE Cost Tool Kit © 2015. This free resource guides you through the process of the ingredient method, in which you identify and add together all program costs. There are several examples to help you get started. It even does the math for you!

Do you have questions, concerns, kudos, or content to extend this aea365 contribution? Please add them in the comments section for this post on the aea365 webpage so that we may enrich our community of practice. Would you like to submit an aea365 Tip? Please send a note of interest to aea365@eval.org . aea365 is sponsored by the American Evaluation Association and provides a Tip-a-Day by and for evaluators.

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  • Jane Davidson · June 15, 2016 at 1:09 pm

    Totally agree, Sarah, that we need to be asking and answering the value for money/value for investment question more often and better.

    Another rad resource to add to your list: Julian King’s awesome free e-book on Value For Investment. It blends the best of the best thinking from economics and evaluation-specific methodology, without getting lost in the details. http://www.julianking.co.nz/downloads/

    Jane

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