A Program Comparison of Costs and Benefits

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

Department of Economics, University of Virginia

March 2008

 

            A comparison of the costs and benefits of each of the nine analyzed youth development programs is needed to determine which ones have the greatest potential. We extracted the programs’ effects on behavior and the associated long-term benefits from our individual evaluations, as presented in Tables 1 and 2.[1] These data are displayed in Figure 1. Additionally, benefit-cost ratios for the programs are presented in Tables 3 and 4 and shown in Figure 2.

 

Table 1

 

 

 

 

 

 

 

Program

ΔPr(Pregnant,STD)

ΔPr(Grad HS)

ΔPr(Arrested)

ΔPr(Substance Abuse)

 

Girls

Boys

Girls

Boys

Girls

Boys

Girls

Big Brothers/Big Sisters

--

0.068

0.068

--

--

0.458 (drugs), 0.274 (alcohol)

Career Academies

0.023[2]

0.007

0.007

--

--

--

--

Children at Risk

--

0.041

0.041

0.065

0.065

0.070

0.070

Drug Education Classes

--

--

--

--

--

0.032 (alcohol), 0.040 (drugs), 0.022 (cigarettes)

JTPA

--

0.0051

0.0771

0.0711

0.0171

--

--

Life Skills

0.033 (multiple sex partners), 0.53 (sex when drunk) 1

0.003

0.003

--

--

0.047

0.047

Service Learning

0.0561

0.050

0.050

0.0801

0.0191

--

--

Sponsor a Scholar

--

0.018 (college)

--

--

--

--

Teen Outreach

0.0171

0.100

0.100

--

--

--

--

 

            The above table presents the programs’ effects that are reported in the evaluations of the programs we used for our own analyses. Service Learning has the largest reported effect on the probability of getting pregnant/STD (5.6%) and on the probability of getting arrested for boys (8%). Teen Outreach has the largest effect on the probability of graduating high school (10%) for both boys and girls,[3] and Big Brothers/ Big Sisters has the largest estimated effect on the probability of graduating high school.  The probability of getting arrested for girls is most affected by the Children at Risk program (6.5%). Furthermore, in the case of substance abuse and more specifically that of drugs and alcohol, the Big Brothers/ Big Sisters program has the largest effect by far (45.8% and 27.4% for drugs and alcohol respectively).

 

 Using the calculations of the long-term benefits from our individual analyses, we can determine which programs have the largest projected long-term benefits in the aforementioned four areas (pregnancy/STD, graduating high school, crime, and substance abuse). As with the above case of the programs’ effects on probabilities, Service Learning has the largest long-term benefit of getting pregnant/STD ($2,072). The three programs with a reported effect on crime reduction produce similar long-term benefits for boys, although Service Learning offers the highest ($32,864). Children at Risk offers the largest long-term benefit in the area of crime reduction for girls ($26,148). The majority of the programs showed moderate long-term benefits of an increased probability of graduating high school, with Sponsor a Scholar and Teen Outreach offering the largest for both boys and girls. The Big Brothers/Big Sisters program shows notably large long-term benefits in the area of reduced substance abuse ($28,035). Figure 1 shows these comparisons of long-term benefits for the case of boys.

 

Table 2

Long-Term Benefits

Program

Reduced Pregnancy/STD

Increased Pr(Grad HS)

Reduced Crime

Reduced Substance Abuse

 

Girls

Boys

Girls

Boys

Girls

Boys

Girls

Big Brothers/Big Sisters

--

$9,3841

$8,4461

--

--

$28,035

Career Academies

--

$5,2661

$7131

--

--

--

--

Children at Risk

--

$5,6061

$5,0461

$26,7021

$26,1481

$3,572

Drug Education Classes

--

$9,3841

$8,4461

--

--

$6,140

JTPA

--

-$5,8901

$1,3501

$29,1671

$6,8391

--

--

Life Skills

$1221

$9,3841

$8,4461

--

--

$2,399

Service Learning

$2,0721

$6,9001

$6,2101

$32,8641

$7,7061

--

--

Sponsor a Scholar

--

$14,5021

$11,5671

--

--

--

--

Teen Outreach

$6291

$13,8001

$12,4201

--

--

--

--

 

Table 3 shows the costs (assuming they are only incurred for one year), benefits, and net benefits of each program as determined in our evaluations. Dividing the gross benefits by the costs per program for boys and girls separately yields benefit cost ratios. This initial calculation of the ratios results in fairly high numbers with a large spread. Most of the programs have benefit-cost ratios between 8 and 46 (1 and 44 for girls) while Service Learning, Life Skills Training, and Drug Education classes are set apart from the rest with larger ratios of 95.09 (37.14 for girls), 515.87 (476.78 for girls), and 675 (638.57 for girls) respectively. Service Learning has only a moderate cost of $450 and yields high long-term benefits in the area of crime reduction. Life Skills Training and Drug Education classes both have an extremely low cost of $23, a key reason for the high benefit-cost ratio, and yield moderate long-term benefits from an increased probability of graduating high school and from reduced substance abuse.

 

 

 

 

Figure 1. Program long-term benefits of changes in behavior.

 

Table 3

Program

Cost

Benefit

 

Net Benefit

Benefit-Cost Ratio

 

 

Boys

Girls

Boys

Girls

Boys

Girls

Big Brothers/ Big Sisters

$1,000

$37,419

$36,480

$36,419

$35,480

37.42

36.48

Career Academies

$450

$5,266

$713

$4,816

$263

11.70

1.58

Children At Risk

$4,700

$38,340

$37,226

$33,640

$32,526

8.16

7.92

Drug Education Classes

$23

$15,525

$14,687

$15,502

$14,664

675.00

638.57

JTPA

$2,377

$26,234

$8,832

$23,857

$6,455

11.04

3.72

Life Skills

$23

$11,865

$10,966

$11,842

$10,943

515.87

476.78

Service Learning

$450

$42,791

$16,712

$42,341

$16,262

95.09

37.14

Sponsor a Scholar

$1,485

$14,502

$13,052

$13,017

$11,567

9.77

8.79

Teen Outreach

$300

$13,800

$13,049

$13,500

$12,749

46.00

43.50

 

            Another, probably better way to analyze the benefits and costs of the program with more reasonable ratios and a smaller spread is to assume that the participants continue with the program every year until they are 18 years old. This is especially true because there is good reason to worry that program benefits will diminish over time if the program is only for a short period.  This implies extra costs for program participation and was not applied to programs in which the average age of participation was high and fairly close to 18 years old. The new costs, benefits, and net benefits resulting from this change are presented in Table 4. Here, the majority of the programs have ratios ranging from 1 to 46 (0 to 44 for girls). The increased program cost greatly reduced the benefit-cost ratio of Service Learning from 95.09 (37.14 for girls) to 27.64 (10.80 for girls). Life Skills Training and Drug Education classes still have benefit-cost ratios far higher than the rest   98.88 (91.38 for girls) and 129.38 (122.39 for girls) respectively.

 

Table 4

Program

Cost

Benefit

 

Net Benefit

Benefit/ Cost Ratio

 

 

Boys

Girls

Boys

Girls

Boys

Girls

Big Brothers/ Big Sisters

$5,217

$37,419

$36,480

$32,202

$31,263

7.17

6.99

Career Academies

$1,220

$5,266

$713

$4,046

-$507

4.32

0.58

Children At Risk

$24,520

$38,340

$37,226

$13,820

$12,706

1.56

1.52

Drug Education Classes

$120

$15,525

$14,687

$15,405

$14,567

129.38

122.39

JTPA

$2,377

$26,234

$8,832

$23,857

$6,455

11.04

3.72

Life Skills

$120

$11,865

$10,966

$11,745

$10,846

98.88

91.38

Service Learning

$1,548

$42,791

$16,712

$41,243

$15,164

27.64

10.80

Sponsor a Scholar

$1,485

$14,502

$13,052

$13,017

$11,567

9.77

8.79

Teen Outreach

$300

$13,800

$13,049

$13,500

$12,749

46.00

43.50

 

Figure 2. Benefit-cost ratios with multiple year costs.

 

            Figure 2 shows the benefit-cost ratios for both boys and girls in all the analyzed youth development programs using multiple year costs. In summary, the program most effective at reducing the probability of getting pregnant/STD and yielding the highest long-term benefits in that area is Service Learning. Teen Outreach is reported to have the highest effect on increasing the probability of graduating high school, while both Teen Outreach and Sponsor a Scholar both show the highest long-term benefits in that area. Service Learning offers the highest long-term benefit in the area of crime reduction for boys, while Children at Risk offers the largest for girls. Big Brothers/ Big Sisters is by far the most effective program for reducing substance abuse. If looking strictly at the overall benefit-cost ratios for the programs, Drug Education classes and Life Skills Training stand out from the rest, while Teen Outreach and Service Learning bring up the middle tier. In the multiple year cost analysis, all but one of the programs have benefits that outweigh the costs for both boys and girls.

 

            One must be careful in interpreting results in that there are many qualifications associated with each number.[4]  Furthermore, all of the estimates are only as good as the underlying estimates from other analyses and the assumptions made to turn program effects into costs and benefits measured in dollars. 

 

References

Harrison, Nia, Nikola Juris, Dori Stern, and Steven Stern (2008).  “Methodology for Estimating the Costs and Benefits for Youth Development Programs.” http://www.people.virginia.edu/~sns5r/ccfstf/youthdevmethodology.htm.

Harrison, Nia, Nikola Juris, Dori Stern, and Steven Stern (2008). “Cost Benefit Analyses of Youth Development Programs.”  http://people.virginia.edu/~sns5r/ccfstf/youthdevelopment.html.



[2] Estimated separately by gender; the other cells are not

[3] The 10% effect is an assumption with reported sensitivity analyses included.

[4] See Harrison et al. (2008) for more information.