What is Cost-Benefit Analysis?
A cost-benefit evaluation calculates the cost of a program and the cost of outcomes, resulting in a cost-benefit ratio. Cost-benefit analysis involves the application of a variety of data collection and analytic methods to determine the financial value of public policies and program activities. The financial value of public activities is derived by determining the cost of the resources invested in these activities and comparing them to the financial value of their outcomes. For example, the cost of a drug court program is compared to the cost-savings due to the reduction in re-arrests for drug court program participants.
NPC’s Approach to Cost-Benefit Analysis
NPC uses a unique proprietary approach to cost analysis called Transactional and Institutional Cost Analysis (TICA). It is designed assist public policymakers and managers in determining the value of public activities and their outcomes to taxpayers—particularly on the state and local levels of government. Public programs on the state and local level frequently involve interaction of multiple public jurisdictions and agencies. For instance, they may link organizations from local criminal justice systems with those from community treatment systems. The TICA approach has been designed to account for this organizational complexity and its cost implications.
NPC’s TICA approach reflects our holistic approach to program evaluation. The TICA methodology is informed by the other major components of program evaluation—process, outcome and impact analysis. The organizational logic that provides the foundation of TICA also makes the process and outcomes analyses associated with program evaluations more powerful and meaningful to public policymakers and managers. For example, NPC has used the TICA methodology to determine the costs and benefits of drug courts in Oregon, California, and Maryland. The positive results of these analyses have led legislators and other public policy makers to allocate more funding to support the maintenance and development of drug courts in these jurisdictions.
For more information regarding cost-benefit analysis and NPC’s TICA approach, please contact Charley Jaspera at (503) 243-2436 x 113, or Jaspera@npcresearch.com.