costs- efficiency and policy evaluation

When do we use cost-effectiveness evaluation?

When we have one main goal ( like reducing crime) and want to find which policy achieves it the lowest cost.

What are the two main pieces of information needed for cost-effectiveness analysis?

Cost of the program

Effect size (impact of the program)

What is the main outcome metric in cost-effectiveness analysis?

Cost per unit of outcome (ex: cost per crime prevented)

What are the 6 steps of cost-benefit evaluation?

State the policy question

Identify perspective

Identify costs and benefits

Assignment monetary values

Compare costs and benefits

Assess sensitivity and limitations

What are marginal costs?

The additional cost of producing one more unit or expanding a program.

What are indirect costs?

Spillover or secondary effects not directly tied to the main goal of the policy.

What are intangible costs?

Costs that are hard to measure in money(ex: pain, fear, loss, of trust).

What is the willingness-to-pay approach?

A method that estimates how much people would pay to avoid a negative outcome or gain a benefit.

What are discount rates?

A way to convert future costs and benefits into present value because money today is worth more than money later

What information is included in a QALY?

Length of life

Quality of life (health condition)

What is the main result from welsh (2015)

Many crime prevention programs (like early childhood programs) produce benefits that exceed their costs, meaning they are economically worthwhile.

What is the Perry preschool program?

An early childhood education program for high-risk children.

What were the benefits of the Perry preschool program?

Reduced crime

Higher education levels

Higher earnings later in life

Was the Perry preschool program cost-beneficial?

Yes, benefits greatly exceeded costs ( high return on investment.

What do case studies help show in policy evaluation?

How policies actually work in real-world settings, including successes and failures.

What is a key takeaway from meets chapter 8?

Implementation matters- a policy can fail even if if the idea is good.

Way are case studies important for policy evaluation?

They provide detailed, real-world insight that numbers alone may not show.

Cost- effectiveness vs cost-benefit

Cost-effectiveness= cost per outcome

Cost-benefit= converts everything into money and compares total value.