Cost-Benefit Evaluation for Drug Education Classes

 Nia Harrison, Nikola Juris, Dori Stern, and Steven Stern

 

Drug education classes aim to provide children with information and skills needed to lead lives free of drugs and violence. Such programs often involve the major elements of addressing misconceptions regarding the normative use of substance abuse, reinforcing knowledge of the harmful consequences of drugs, and providing skills necessary to resist the use of substances (Longitudinal Evaluation, 2006). Using the analysis of drug education classes in junior high schools in Hansen and Graham (1991), we estimated the costs and benefits, as seen in Table 1, in order to measure the net long-term benefit of the program. We performed a number of sensitivity analyses, shown in Table 2, to measure the robustness of our results.[1]

 

           

Table 1

Boys

Girls

Effect on probability of getting drunk

0.069

0.069

Effect on probability of using alcohol

0.032

0.032

Effect on probability of using marijuana

0.04

0.04

Effect on probability of using cigarettes

0.022

0.022

Probability of graduating high school

.068

.068

Average high school wage per hour

$15.00

$13.50

Annual wage

$30,000

$27,000

Cost of the program

$23

$23

Annual benefit of not getting drunk

$5,103

$5,103

Annual benefit of not using alcohol

$1,701

$1,701

Annual benefit of not using marijuana

$5,103

$5,103

Annual benefit of not using cigarettes

$156

$156

Annual benefit of graduating high school

$938

$845

Discount factor

0.9

0.9

Long-term benefit of not getting drunk

$3,521

$3,521

Long-term benefit of not using alcohol

$544

$544

Long-term benefit of not using marijuana

$2,041

$2,041

Long-term benefit of not using cigarettes

$34

$34

Long-term benefit of graduating high school

$9,384

$8,446

Net benefit

$15,502

$14,564

 

Hansen and Graham (1991) estimate that drug education classes decrease the probability of getting drunk by 6.9%, decrease the probability of using alcohol by 3.2%, decrease the probability of using marijuana by 4%, and decrease the probability of using cigarettes by 2.2%.[2]  Lynskey et al. (2003) reported that doing drugs reduces the probability of completing high school by 6.8%. We assumed that an average male (female) high school graduate earns $15.00 ($13.50) per hour. Assuming one works 2000 hours per year, we have base annual earnings of $30,000 ($27,000) for males (females). We estimated the cost of the program to be the same as that for LifeSkills Training, a program which aims to reduce the risks of alcohol, tobacco, drug abuse, and violence (LifeSkills, 2008). We estimated the annual benefit of not getting drunk using an estimate of the benefit of not doing drugs. Adjusting estimates from French et al. (2002) to fit a one-year time period, we calculated that the annual benefit of not doing drugs and of not getting drunk is $5,103. This estimate was also used to estimate the annual benefit of not using marijuana. The annual benefit of not using alcohol was assumed to be one-third the annual benefit of not getting drunk, yielding $1,701. The annual benefit of not using cigarettes was calculated by multiplying the assumed cost of cigarettes, $3, times 52 weeks per year, resulting in $156. The annual benefit of graduating high school was calculated by multiplying annual high school graduate earnings by 46% (Card, 1999) and by the effect of drugs on the probability of graduating high school, resulting in $938 ($845) for boys (girls).

 

Table 2

 

 

 

 

 

Assumption

Net Benefit of the Program

Average high school wage per hour

Boys

$15

$15,502

 

 

$30

$24,886

 

Girls

$13.50

$14,564

 

 

$27

$23,010

Annual benefit of not using cigarettes

Boys

$156

$15,502

 

 

$1,040

$15,697

 

Girls

$156

$14,564

 

 

$1,040

$14,759

Discount factor

Boys

0.9

$15,502

 

 

0.8

$7,740

 

Girls

0.9

$14,564

 

 

0.8

$7,271

Effect of drugs on the probability of graduating high school

Boys

.068

$15,502

 

 

0

$6,118

 

Girls

.068

$14,564

 

 

0

$6,118

Depreciating benefits

Boys

Base1/(1-β)

$15,502

 

 

1.22

$1,871

 

Girls

Base1/(1-β)

$14,564

 

 

1.22

$1,756

Cost of the Program

Boys

$23

$15,502

 

 

$120

$15,405

 

Girls

$23

$14,564

 

 

$120

$14,467

 

In order to translate these calculations into long-term benefits, we assumed that the annual discount factor was 0.9. The long-term benefit of not getting drunk was calculated by multiplying the program’s effect on the probability of getting drunk by the annual benefit of not getting drunk, then discounting the stream of lifetime benefits. We used similar calculations for the program’s effect on the probability of using alcohol and cigarettes, yielding $544 for alcohol and $34 for cigarettes.[3]  A similar calculation was done for the program’s effect on the probability of graduating from high school. Adding up all the long-term benefits and subtracting the cost of the program yields a net benefit of $15,502 ($14,564) for boys (girls).

 

            In Table 2, we changed various assumptions we had made for the base case scenario, one at a time while holding the others constant, in order to measure the sensitivity of the base case analysis. Doubling the hourly wage received by a high school graduate results in a new net benefit of $24,886 ($23,010) for boys (girls).  Assuming that the cost of cigarettes is $20 rather than $3 yields a new net benefit of $15,697 ($14,759) for boys (girls).  If we decrease the discount factor from 0.9 to 0.8, net benefits become $7,740 ($7,271) for boys (girls). Assuming that there is no effect of drugs on the probability of graduating high school decreases the net benefits to $6,118 for both boys and girls.

 

            There was considerable concern that the benefits of the program would dissipate over time. To measure the impact of this concern, we considered the possibility that benefits would depreciate by 80% per year during teen years. The average age of participation in drug education classes is 12 years old, leading to a multiplier of 1.22 for the discounting of future benefits. This reduction in the multiplier causes net benefits to decrease to $1,871 ($1.756) for boys (girls).

 

            One way to deal with this concern is to consider the possibility that the participant would continue with the program each year until he/she is 18 years old, thus not allowing for the dissipation of benefits. This means the cost of the program would increase to $120, yielding new net benefits of $15,405 ($14.467) for boys (girls).

 

All of the sensitivity analyses indicate that drug education classes can yield high benefits.  However, they rely on estimates from Hansen and Graham (1991) which is more optimistic than some other, more recent evaluations.

 

References

 

Card, D. (1999). “The Causal Effect of Education on Earnings.” In O. Ashenfelter & D. Card (Eds.), Handbook of Labor Economics, 3: 1801-1863. Amsterdam: North-Holland.

French, M., H. Salomé, J. Sindelar, and A. McLellan (2002). “Benefit-Cost Analysis of Addiction Treatment: Methodological Guidelines and Empirical Application Using the DATCAP and ASI.” Health Services Research. 37(2): 433-455.

Hansen, W. and J. Graham (1991). “Preventing Alcohol, Marijuana, and Cigarette Use Among Adolescents: Peer Pressure Resistance Training versus Establishing Conservative Norms.” Preventative Medicine. 20: 414-430.

Harrison, Nia, Nikola Juris, Dori Stern, and Steven Stern (2008). “Methodology for Youth Development Cost-Benefit Analyses.”  http://www.people.virginia.edu/~sns5r/ccfstf/youthdevmethodology.pdf.      

LifeSkills Training (2008). National Health Promotion Associates. http://www.lifeskillstraining.com/index.php

Longitudinal Evaluation of the New Curricula for the D.A.R.E. Middle (7th Grade) and High School (9th Grade) Programs: TAKE CHARGE OF YOUR LIFE (2006). University of Akron. http://www.dare.com/home/Resources/documents/DAREMarch06ProgressReport.pdf

Lynskey, M., C. Coffey, L. Degenhardt, J. Carlin, and G. Patton (2003). “A Longitudinal Study of the Effects of Adolescent Cannabis Use on High School Completion.” Addiction. 98(5): 685-692.

 



[1] Details of Methodology are available at Harrison, Juris, Stern, and Stern (2008).

[2] Note that some more recent analyses of DARE have questioned its efficacy.

[3] Note that we include no benefit associated with the cost of disease later in life caused by cigarettes.  Such a calculation is difficult because one must also include the savings on medical expenses associated with people dieing earlier than otherwise.