Economic evaluation in education : cost-effectiveness and benefit-cost analysis

The past decade has seen increased attention to cost-effectiveness and benefit-cost analysis in education as administrators are being asked to accomplish more with the same or even fewer resources, philanthropists are keen to calculate their "return on investment" in social programs, and the general public is increasingly scrutinizing how resources are allocated to schools and colleges.

This text (titled Cost-Effectiveness Analysis in its previous editions) is the only full-length book to provide readers with the step-by-step methods they need to plan and implement a benefit-cost analysis in education. The authors examine a range of issues, including how to identify, measure, and distribute costs; how to measure effectiveness, utility, and benefits; and how to incorporate cost evaluations into the decision-making process. The updates to the Third Edition reflect the considerable methodological development in the evaluation literature, and the greater empiricism practiced by education researchers, to help readers learn to apply more advanced methods to their own analyses.

SAGE congratulates author Henry M. Levin, winner of the 2017 AERA Distinguished Contributions to Research in Education Award.

List of Tables, Figures, and Examples	p. xi
Preface	p. xv
Acknowledgments to the Second Edition	p. xvii
Acknowledgments to the Third Edition	p. xix
About the Authors	p. xxiii
Chapter 1 Introduction to Economic Evaluation	p. 1
1.1 Purpose and Goals of the Book	p. 3
1.2 The Importance of Economic Evaluations	p. 5
1.3 Economic Evaluation for Decisionmaking in Education	p. 9
1.4 Summary or Approaches to Economic Evaluation	p. 21
1.5 Economic Evaluations and Policymaking	p. 24
1.6 Outline of the Book	p. 26
Discussion Questions	p. 27
Chapter 2 Establishing an Analytic Framework	p. 29
2.1 Identifying the Problem	p. 30
2.2 Taking Account of the Audience and Perspective	p. 33
2.3 Relating Economic Evaluation to the Theory of Change	p. 37
2.4 Determining If Economic Evaluation Is Necessary	p. 39
2.5 Conclusions	p. 41
Discussion Questions	p. 42
Exercises	p. 42
Chapter 3 Cost Concepts	p. 45
3.1 The Concept of Costs	p. 46
3.2 Cost per Unit	p. 49
3.3 Costs and the Theory of Change	p. 51
3.4 Costs Data and Budgetary Information	p. 54
3.5 Motivation for Cost Analysis	p. 56
3.6 Conclusions	p. 58
Discussion Questions	p. 59
Exercises	p. 59
Chapter 4 The Ingredients Method	p. 61
4.1 Identifying Ingredients	p. 62
4.2 Specifying Ingredients	p. 63
4.3 Sources of Ingredients Information	p. 71
4.4 Conclusions	p. 74
Discussion Questions	p. 75
Exercises	p. 75
Chapter 5 Placing Values on Ingredients	p. 77
5.1 Methods for Valuing Ingredients	p. 78
5.2 Placing Dollar Values on Ingredients	p. 82
5.3 Costs Over Multiple Years	p. 93
5.4 Conclusions	p. 100
Discussion Questions	p. 100
Exercises	p. 101
Chapter 6 Analyzing and Reporting Costs	p. 103
6.1 Tabulating Total Cost Using a Cost Worksheet	p. 104
6.2 Reporting Costs	p. 109
6.3 Allocating Costs Among Constituencies	p. 117
6.4 Analyzing Cost Determinants and Generalizing Costs	p. 123
6.5 Conclusions	p. 128
Discussion Questions	p. 129
Exercises	p. 129
Chapter 7 Effectiveness	p. 131
7.1 Specifying Effectiveness	p. 132
7.2 Methods for Identifying Effectiveness	p. 141
7.3 Utility Analysis	p. 149
7.4 Conclusions	p. 162
Discussion Questions	p. 163
Exercises	p. 163
Chapter 8 Cost-Effectiveness Analysis	p. 165
8.1 Cost-Effectiveness Ratios	p. 166
8.2 Alternative Cost-Effectiveness Metrics	p. 169
8.3 Interpreting Cost-Effectiveness Ratios	p. 173
8.4 Explaining Cost-Effectiveness Ratios	p. 176
8.5 Evidence on Cost-Effective Interventions	p. 183
8.6 Conclusions	p. 189
Discussion Questions	p. 190
Exercises	p. 191
Chapter 9 Estimating Benefits	p. 193
9.1 The Concept of Benefits	p. 195
9.2 Specifying Benefits	p. 197
9.3 Valuing Educational Benefits Through Earnings	p. 204
9.4 Valuing Educational Benefits Through Shadow Pricing	p. 207
9.5 Applying Benefits in Benefit-Cost Analysis	p. 217
9.6 Conclusions	p. 218
Discussion Questions	p. 219
Exercises	p. 219
Chapter 10 Benefit-Cost Analysis	p. 221
10.1 Combining Benefits and Costs Into Economic Metrics	p. 222
10.2 Performing Benefit-Cost Analysis	p. 229
10.3 Examples of Benefit-Cost Analysis	p. 233
10.4 Conclusions	p. 239
Discussion Questions	p. 241
Exercises	p. 241
Chapter 11 Accounting for Uncertainty	p. 245
11.1 Type of Uncertainty and Sensitivity	p. 246
11.2 General Sensitivity Testing	p. 250
11.3 Sensitivity Testing of Cost Estimates	p. 254
11.4 Sensitivity Testing of Cost-Effectiveness	p. 257
11.5 Sensitivity Testing of Benefit-Cost Analysis	p. 258
11.6 Distributional Issues	p. 262
11.7 Conclusions	p. 264
Discussion Questions	p. 265
Exercises	p. 265
Chapter 12 Checklist for Economic Evaluations	p. 269
12.1 A Checklist for Appraising Economic Evaluations	p. 270
12.2 Appraising Economic Evaluations	p. 273
12.3 Conclusions	p. 277
Discussion Questions	p. 278
Exercises	p. 278
Chapter 13 Economic Evaluations for Education Policy	p. 279
13.1 Applying Economic Analysis	p. 280
13.2 Expanding the Use of Economic Evaluation	p. 283
13.3 Decisionmaking and Economic Evaluation	p. 288
13.4 Prioritizing Educational Investments	p. 292
13.5 Using Economic Evaluations to Improve Education Research	p. 297
13.6 The Future of Economic Evaluation of Education	p. 299
13.7 A Final Word	p. 300
Discussion Questions	p. 300
Appendix A Answers to Even-Numbered Exercises	p. 301
Appendix B CostOut Tool	p. 313
References	p. 317
Index	p. 339

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