Cost-Effectiveness Analysis in Practice

Abstract

In this article, we perform cost-effectiveness analysis on interventions that improve the rate of high school completion. Using the What Works Clearinghouse to select effective interventions, we calculate cost-effectiveness ratios for five youth interventions. We document wide variation in costeffectiveness ratios between programs and between sites within multisite programs, reflecting differences in resource use, program implementation, and target population characteristics. We offer suggestions as to how cost-effectiveness data can be used to inform policymaking, with the goal of improving the efficiency with which public and private resources are employed in education.

Cost Analysis of a School-Based Social and Emotional Learning and Literacy Intervention

“…In this model, resources are referred to as the “ingredients” of the program. The ingredients approach to cost estimation has three phases: “(a) identification of ingredients; (b) determination of the value or cost of the ingredients; and (c) an analysis of the costs in an appropriate decision-oriented framework, e.g., based on cost burden across various agencies; at different levels of scale; adapted for different geographical locations or modes of implementation” (Hollands et al., 2013, p. 9). The ingredients model encourages the cost evaluator to collect resource information from a various sources.…”

“…The ingredients model encourages the cost evaluator to collect resource information from a various sources. Reports, articles, websites, and interviews with key members of the program help the evaluator construct a detailed ingredients spreadsheet, listing type and quantity of every resource (Hollands et al., 2013; Levin & McEwan, 2001; Yates, 1999).…”

Power Analysis for Two-Level Multisite Randomized Cost-Effectiveness Trials

“…Examples of common ingredients include personnel (e.g., principal, teacher, tutor, parents), facilities (e.g., computer lab, classroom), materials and equipment (e.g., books, testing materials, computers), and other inputs (e.g., transportation). The CostOut Tool Kit (Hollands et al, 2015) is specifically tailored to facilitate the management and valuing of ingredients relevant to educational evaluations as illustrated in studies of interventions focused on teacher selection and training, mathematics curricula, increasing the length of the school day, peer tutoring, and reduction in class size (Hollands et al, 2016).…”

“…When designing RCETs, researchers should take account of both the expected variation of the effectiveness measure (e.g., achievement) and the variance in the cost of the intervention. It is well known from prior studies that the cost of interventions can vary substantially across sites (Hollands et al, 2013; Jacob et al, 2016). Moreover, they also frequently vary across individuals within sites as a result of differential use of resources (e.g., parents’ time, volunteer’s time, students’ transportation to training sites; Hollands et al, 2013; Levin & Belfield, 2015).…”

“…It is well known from prior studies that the cost of interventions can vary substantially across sites (Hollands et al, 2013; Jacob et al, 2016). Moreover, they also frequently vary across individuals within sites as a result of differential use of resources (e.g., parents’ time, volunteer’s time, students’ transportation to training sites; Hollands et al, 2013; Levin & Belfield, 2015). Thus, the cost data also have a nesting structure that needs to be taken into account when researchers design RCETs (Belfield & Bowden, 2019; Levin & Belfield, 2015).…”