Information Session: When a Cost Benefit Analysis Might Just Do the Trick

Cost Benefit Analysis (CBA) is a powerful tool for determining the economic value of a project. It is widely used by governments and others to evaluate the impact of their projects on the economic welfare of their constituents or stakeholders. CBA takes a rigorous and systematic approach to identifying and assigning values to the costs and benefits arising from a project. It can include both monetary and non-monetary costs and benefits.

CBA is useful because it:

• provides decision makers with quantitative information about a project; 
• encourages decision makers to take account of all the positive and negative effects of a project and discourages them from making decisions based only on the impacts on a single group within the community; 
• assesses the impact of projects in a standard manner, which promotes comparability, assists in the assessment of relative priorities and encourages consistent decision making; 
• captures the various linkages between the project and other sectors of the economy (for example, increased safety may reduce health care costs), helping decision-makers maximise net benefits to society; and  
• helps identify cost-effective solutions to problems by identifying and measuring all costs.

By working with economists to place economic values on the full range of benefits arising from a project, community organisations can make it easier for funders to understand the economic context of those benefits. And that makes it easier for them to understand the economic consequences of their funding decisions.

Although funders are often more convinced by economic data, all too often, community sector organisations shy away from using economic evidence, preferring instead to rely on qualitative evaluations to make their case for funding.

This session will explore:

• what is a CBA and what makes for a good CBA when applied to social programs and projects;
• how to understand what makes for compelling economic evidence in the eyes of economists; 
• how to know when a CBA might be more useful than a qualitative evaluation; 
• how to communicate your economic evidence to funders; and 
• key things to know if you are thinking of commissioning a CBA.

The research team of Emeritus Professor Anne Daly, Greg Barrett and Rhiân Williams has undertaken numerous CBAs that have had significant national  impact across a range of community sectors. They have produced CBAs of Indigenous peacemaking initiatives, community playgroups, independent disability advocacy, Indigenous circle sentencing initiatives, supports to victims of crime and accident compensation conciliation schemes. Their research has been used to successfully secure ongoing funding, been drawn on by the Productivity Commission, the Royal Commission and Board of Inquiry into the Protection and Detention of Children in the Northern Territory and the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability to support the development of recommendations and influenced the way CBAs are now being conducted by other research agencies.

Presenters

Emeritus Professor Anne Daly Anne is Emeritus Professor of Economics at the University of Canberra, a Visiting Fellow with the Centre for Aboriginal Economic Policy Research at the Australian National University and an associate of National Centre for Social and Economic Modelling (NATSEM) at the University of Canberra. She is also a member of the Centre for Labour Market Research (CLMR) and has undertaken research work on Aboriginal and Torres Strait Islander issues for over 30 years focusing on labour force participation, gender pay issues, migration, the economics of education and family. This has involved both desk-based work and community-based activities.

Rhiân Williams Rhiân is a dispute systems design practitioner, researcher and community engagement specialist. She was a Principal Researcher on research projects with the Australian Institute of Aboriginal and Torres Strait Islander Studies and the Federal Court of Australia. Most recently she was engaged as the Independent Procedural Advisor to the ACT Human Rights Commission in their role of Independent Honest Broker for the ACT’s first restorative reform process, centred on coronial reform. She was also engaged to review the NDIA’s conduct as a Model Litigant at the Administrative Appeals Tribunal, which included the design and analysis of a national survey of the experience of people with disability, family members, carers and allies.