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Educational Management

Notes wide-ranging and creative as possible. This procedure sets the stage for the evaluation of effectiveness
of the alternatives, a process which is akin to the standard use of evaluation methods (e.g., Rossi
and Freeman 1985). Estimates of effectiveness can be derived from previous evaluations or from
tailored evaluations for the present purpose.
It is important to emphasize that the evaluation of effectiveness is separable from the evaluation of
costs. Most standard evaluation designs for assessing the effectiveness of an intervention are also
suitable for incorporation into cost-effectiveness studies. These can be found in the standard evaluation
literature (see e.g., Cook and Campbell 1979, Rossi and Freeman 1985). The cost analysis is not
typically found in the general evaluation literature and has been developed independently as a
subspecialization (Levin 1983).
14.4.2 Cost Estimation
The costs of an intervention are defined as the value of the resources that are given up by society to
effect the intervention. These are referred to as the ingredients of the intervention, and it is the social
value of those ingredients that constitute its overall cost. At a later stage the distribution of these
costs among the decision-making agency and other entities can be assessed. Accordingly, the method
sets out systematically to identify and ascertain the value of the ingredients that are required for
each alternative that is under consideration.
The ingredients approach to cost estimation entails three distinct phases : (a) identification of
ingredients; (b) determination of the value or cost of the ingredients and the overall costs of an
intervention; and (c) an analysis of the costs in an appropriate decision-oriented framework.
The first step is to ascertain which ingredients are required for an intervention. Most educational
interventions are labor-intensive, so an initial concern is to account for the number and characteristics
of personnel. It is important to stipulate whether personnel are part-time or full-time and the types
of skills or qualifications that they need. Beyond this it is necessary to identify the facilities, equipment,
materials, and other ingredients or resources which are required for the intervention.
Identification of ingredients requires a level of detail that is adequate to ensure that all resources are
included and are described adequately to place cost values on them. For this reason, the search for
ingredients must be systematic rather than casual.
The primary sources for such data are written reports, observations, and interviews. Written reports,
usually contain at least a brief history and description of the intervention. Other sources of information
must be used to corroborate and supplement data on ingredients from evaluations and descriptive
reports. If the intervention is present at a nearby site, it may be possible to visit and gather additional
data on ingredients through observation. A third valuable source is that of interviews, where present
or former personnel are asked to identify resources from among a number of different classifications.
The three principal types of information-reports, observations, and interviews-can be used to assure
the accuracy of the data by comparing the findings from each source and reconciling differences, the
process of triangulation.
Once the ingredients have been identified and stipulated, it is necessary to ascertain their costs. In
doing this, all ingredients are assumed to have a cost, including donated or volunteer’ resources.
That is, they have a cost to someone, even if the sponsoring agency did not pay for them in a
particular situation. At a later stage the costs will be distributed among the constituencies who paid
them, but at this stage the need is to ascertain the total costs of the intervention.

Ingredients can be divided into those that are purchased in reasonably competitive markets, and
those that are obtained through other types of transactions. In general, the value of an ingredient for
costing purposes is its market value. In the case of personnel, market value may be ascertained by
determining what the costs would be for hiring a particular type of person. Such costs must include
not only salary, but also fringe benefits ‘ and other employment costs that are paid by the employer.
Many of the other inputs can also be costed by using their market prices. These include the costs of

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