Benefit Cost Analysis (BCA)
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1 Benefit Cost Analysis (BCA) and Integrated Data Systems (IDS) David W. Stevens The Jacob France Institute University of Baltimore November 29, 2011 Integrating Education, Health and Human Services Data to Inform Public Policy
2 Current relevance of the topic: 7 forums in 6 weeks Theory, Science, and Statistics in the Use of Benefit Cost Analysis, October Utilizing Administrative Data: Technical, Statistical and Research Issues, October National Academy of Social Insurance, November 2 Association for Public Policy and Management, November 3 5 Workforce Data Quality Initiative, November 14 State Longitudinal Data Systems P 20W Best Practice Conference, e November oe Integrating Health and Human Services and Education Data to Inform Public Policy, November 28 29
3 Overview Benefit cost analysis (BCA) concepts 5 minutes Utility of BCA for policy decision making 5 minutes The value of Integrated Data Systems (IDS) for conducting decision relevant BCA 5 minutes Examples of IDS use 10 minutes 0 utes A vision of future IDS availability, access and use 15 minutes
4 Benefit cost analysis (BCA) concepts BCA is more than cost effectiveness analysis BCA is a process, not a decision made step The importance of standardization and rigor Perspective(s)/standing Program level and portfolio analyses Private and social; market and non market Shadow prices assigned to non market benefits and costs Willingness to pay and willingness to accept
5 Utility of BCA for policy decision making Real time case management vs. statistical decision support Internal implicit (opportunity cost) considerations and externalities Risk and uncertainty Sensitivity analysis; Monte Carlo simulation Proportionate analysis Information quality [Boruch session follows] and gaps gp
6 The value of IDS for conducting decision relevant i BCA Ex ante and ex post applications Longitudinal integrated data; not isolated silos of historical information Scope program(s), p data fields, time coverage Current examples of decisions that could use IDS inputs: USDA: No big savings from pizza [and French fries] in schools. Perspective/standing considered? ( Washington Post,11 17, A3) Transportation Security Administration (TSA) has not improved aviation security. TSA response is that it seeks to provide the most effective security focusing on those who present the highest risk, in the most efficient way possible (Washington Post, 11 17, A7) Congress kills request for new climate service. Congress barred the National Oceanic and Atmospheric Administration (NOAA) from launching what the agency bills as a one stop shop for climate information. Demand for such data is sky rocketing. (Washington Post, 11 21, A3)
7 Health, social services, education and workforce examples of IDS use Extension of Emergency Unemployment Compensation (EUC) and Extended [UI] Benefit (EB) financing legislation December 2011 Owner occupied home foreclosure response Skill obsolescence response P 20W life cycle intervention impact points Primary healthcare availability Correctional education; developmental education
8 A vision of future IDS availability, access and use The confidentiality ( and privacy) fear factor hurdles Federated vs. warehouse designs ID management approach and accuracy standards Ex ante and ex post priority choices Perspective(s)/standing encompassed Interpersonal equity considerations Inclusion of shadow price calculations; choice of discount rate; treatment of uncertainty continued
9 A vision of future IDS availability, lbl access and use (cont.) Multiple types of expertise are needed to contribute benefit and cost estimates Cultural cognition research (Yale Law School) individual vs. collective perceptions p of risk; and Daniel Kahneman (2011) Thinking, Fast and Slow Communicators must attend to the cultural meaning as well as thescientific content of information, Kahan, Jenkins Smith and Braman, Cultural Cognition of Scientific Consensus (2011), Journal of Risk Research, 14:2, pp Common language clarity and persuasiveness of communication
10 Contact information: David W. Stevens, Director The Jacob France Institute University i of Baltimore li dstevens@ubalt.edu
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