scholarly journals Using Benefit-Cost Analysis to Scale Up Early Childhood Programs through Pay-for-Success Financing

2015 ◽  
Vol 6 (3) ◽  
pp. 628-653 ◽  
Author(s):  
Judy A. Temple ◽  
Arthur J. Reynolds
Keyword(s):  
Early Childhood ◽  
Cost Analysis ◽  
Social Impact ◽  
Scale Up ◽  
Cost Savings ◽  
Early Childhood Programs ◽  
Benefit Cost Analysis ◽  
The Government ◽  
Private Investors ◽  
Benefit Cost

Increasing access to effective preschool programs is a high priority at local, state, and federal levels. Recently, two initiatives to expand preschool programming in Illinois and Utah have used funds from private investors to scale up existing programs. Private-sector social impact investors provide funding to nonprofit or public preschool providers to increase the number of children served. If the measured outcomes from preschool participation meet predetermined goals, then the estimated government cost savings arising from these preschool interventions are used to repay the investors. Social impact investing with a “Pay-for-Success” contract can help budget-constrained governments expand proven or promising preventive interventions without the need to increase taxes. Benefit-cost analysis (BCA) plays a crucial role in helping to identify which social, educational, or health interventions are suitable for this type of innovative financing. Benefit-cost analysts are needed to design the structure of the success payments that the government will make to the private investors. This paper describes social impact borrowing as a new method for financing public services, outlines the contribution of BCA, and discusses the innovative use of social impact financing to promote scaling evidence-based Child-Parent Centers and other early childhood programs.

scholarly journals Benefit-Cost Analysis of a Package of Early Childhood Interventions to Improve Nutrition in Haiti

2019 ◽  
Vol 10 (S1) ◽  
pp. 154-184 ◽  
Author(s):  
Brad Wong ◽  
Mark Radin
Keyword(s):  
Early Childhood ◽  
Cost Analysis ◽  
National Income ◽  
Base Case ◽  
Cost Ratio ◽  
Case Scenario ◽  
Base Case Scenario ◽  
Benefit Cost Analysis ◽  
Benefit Cost ◽  
Early Childhood Interventions

We conduct a benefit-cost analysis of a package of early childhood interventions that can improve nutrition outcomes in Haiti. Using the Lives Saved Tool, we expect that this package can prevent approximately 55,000 cases of child stunting, 7,600 low-weight births and 28,000 cases of maternal anemia annually, if coverage reaches 90% of the target population. In addition, we expect these nutrition improvements will avoid 1,830 under-five deaths, 80 maternal deaths and 900,000 episodes of child illness every year. Those who avoid stunting will experience lifetime productivity benefits equivalent to five times gross national income per capita in present value terms, at a 5% discount rate. While previous benefit-cost analyses of this specific package have only estimated the lifetime productivity benefits of avoided stunting, this paper also accounts for reductions in fatal and non-fatal health risks. In the base case scenario, the annualized net benefits of the intervention equal Haitian gourdes 13.4 billion (USD 211 million) and the benefit-cost ratio (BCR) is 5.2. Despite these substantial benefits, the package may not be the most efficient use of a marginal dollar, with alternative interventions to improve human capital yielding BCRs approximately three to four times higher than the base estimate.

scholarly journals Benefit-Cost Analysis: Distributional Considerations under Producer Quota Buyouts

2010 ◽  
Vol 1 (1) ◽  
pp. 1-15 ◽  
Author(s):  
Andrew Schmitz ◽  
Troy G. Schmitz
Keyword(s):  
Cost Analysis ◽  
Distributional Effects ◽  
Empirical Application ◽  
Benefit Cost Analysis ◽  
Consumer Benefits ◽  
The Government ◽  
Program Change ◽  
Benefit Cost ◽  
Theory Of Production ◽  
The U.S

AbstractBenefit-cost (B/C) analysis must take into account the distributional effects from a policy or program change. To highlight this, we focus on the theory of production quota buyouts within a B/C framework. As an empirical application, we provide evidence on the distributional effects of the U.S. government buyout of the peanut program in 2002, where production quotas were key ingredients. Two approaches to producer compensation under the buyout are discussed: (1) value of quota approach and (2) gains from quota approach. In the peanut quota program buyout, the U.S. government chose the value of quota approach. Both consumers and producers were made better off as a result of the buyout, and there was a net gain in efficiency. If the government had chosen the gains from quota approach instead, government expenditures and producer gains would have been lower, and consumer benefits would have remained unchanged. Under either approach, the B/C ratios calculated for the government quota buyout are almost identical.

scholarly journals Toward Standardization of Benefit-Cost Analysis of Early Childhood Interventions

2012 ◽  
Vol 3 (1) ◽  
pp. 1-45 ◽  
Author(s):  
Lynn A. Karoly
Keyword(s):  
Early Childhood ◽  
Economic Returns ◽  
Early Childhood Programs ◽  
Public And Private ◽  
Benefit Cost Analysis ◽  
Current State ◽  
Future Outcomes ◽  
Public And Private Sector ◽  
Benefit Cost ◽  
Early Childhood Interventions

A growing body of benefit-cost analyses (BCAs) of early childhood programs has been prompted by the increased demand for results-based accountability when allocating public and private sector resources. While the BCAs of early childhood programs serve to make such investments more compelling, there are limitations in the current state of the art, including a lack of standardization in the BCA methods used, from discount rates to shadow prices. The objective of this paper is to delineate a set of standards for conducting BCAs of early childhood programs. The paper reviews the existing evidence of the economic returns from early childhood programs that serve children and families in the first five years of life, discusses the challenges that arise in applying the BCA methodology such programs, highlights the variation in current methods used, and proposes a set of standards for applying the BCA methodology to early childhood programs. The recommendations concern issues such as the discount rate to use and the age to which costs and benefits should be discounted; stakeholder disaggregation; outcomes to value, the associated values, and projections of future outcomes; accounting for uncertainty; sensitivity analysis; and reporting of results. The proposed standards can guide the choices that analysts need to make about the methods to use when performing BCAs for one or more early childhood programs and they can support greater transparency in the results the analysts provide. The standards can also support consumers of the BCA results in their need to understand the methods employed and the comparability across different studies.

scholarly journals Designing Smarter Regulation with Improved Benefit-Cost Analysis

2010 ◽  
Vol 1 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Robert Hahn
Keyword(s):  
Cost Analysis ◽  
Economic Model ◽  
The United States ◽  
Primary Objective ◽  
Normative Theory ◽  
Benefit Cost Analysis ◽  
Special Cases ◽  
Standard Textbook ◽  
The Government ◽  
Benefit Cost

AbstractBenefit-cost analysis is required for many regulatory decisions in the United States and in other countries. In this paper, I examine a standard textbook model that is used in benefit-cost analysis as it is actually applied to environmental policy and other areas of regulation. My primary objective is to suggest how including some key factors in the analysis could promote the development of smarter regulation.I begin by presenting a standard economic model for government intervention in markets, which balances benefits and a narrow definition of costs. I then introduce a richer normative theory that considers several political and economic costs that are frequently not considered in analyzing real-world applications. Examples include costs associated with rent seeking, design and implementation, and raising revenues. The richer theory suggests that the government should supply less of a good, or ask the private sector to provide less of that good, than the standard economic model suggests. The reason is that intervening in markets is often more costly than the standard model assumes. In special cases, the theory provides guidance on the setting of socially optimal taxes and subsidies. I then explore how the theory needs to be modified in the presence of biased estimates of benefits and costs. I conclude with a discussion of how the theoretical framework can be applied to the actual design of regulatory policy.

scholarly journals Florida's Citrus Canker Eradication Program (CCEP): Benefit-Cost Analysis

EDIS ◽  
1969 ◽  
Vol 2005 (3) ◽  
Author(s):  
Marisa L. Zansler ◽  
Thomas H. Spreen ◽  
Ronald P. Muraro
Keyword(s):  
Cost Analysis ◽  
Cost Savings ◽  
Citrus Canker ◽  
University Of Florida ◽  
Eradication Program ◽  
Benefit Cost Analysis ◽  
Florida Citrus ◽  
Predicted Values ◽  
The Cost ◽  
Benefit Cost

In this paper, an economic analysis of the Citrus Canker Eradication Program (CCEP) on the Florida citrus industry is conducted through employment of a benefit-cost analysis of retaining the current policy. A benefit-cost analysis of the CCEP in Florida is developed using the predicted values of the benefits and the costs associated with the policy. The actual expenditures of implementation to-date are weighed against the estimated loss of revenue and the cost savings associated with an industry with pervasive citrus canker in an attempt to assess the net benefits of the policy. This is EDIS document FE531, a publication of the Department of Food and Resource Economics, Florida Cooperative Extension Service, Institute of Food and Agricultural Sciences, University of Florida, Gainesville, FL. Published March 2005. 

Benefit-cost analysis of near-infrared spectroscopy technology adoption by Alberta hog producers

2020 ◽  
Vol 100 (3) ◽  
pp. 557-569
Author(s):  
Bijon A. Brown ◽  
Henry An ◽  
Scott R. Jeffrey
Keyword(s):  
Cost Analysis ◽  
Near Infrared ◽  
Cost Savings ◽  
Production Costs ◽  
Nutritional Content ◽  
Near Infrared Reflectance ◽  
Benefit Cost Analysis ◽  
Feed Cost ◽  
Feed Costs ◽  
Benefit Cost

Feed cost is a significant component of livestock production costs, accounting for over half of total operating costs for hog producers. This provides an incentive to minimize feed costs while meeting dietary requirements. However, producers may not know the nutritional content of their feed grains with certainty. Near-infrared reflectance spectroscopy (NIRS) imaging technology can quickly and accurately estimate the nutritional content of different types of feed grain. Although the technology has been available for almost five decades, producer adoption has been slow due to issues with cost and usability. The objectives of this study are to estimate feed cost savings resulting from the adoption of NIRS on a representative Alberta hog farm and to conduct a benefit-cost analysis to investigate the potential viability of NIRS adoption. A joint mathematical programming-simulation approach is used to estimate the cost savings generated by adoption of NIRS technology. Results suggest mean annual savings of up to $4 per hog and benefit-cost results suggest that adopting NIRS technology may be viable, particularly for larger Alberta hog operations. However, initial investment requirements, uncertainty in the magnitude of benefits, and access to the technology from feed mills will likely continue to limit adoption.

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