A few weeks ago, I published a brief guide to data and information requirements for economic evaluation of social interventions. Cost-benefit analysis (CBA) and social return on investment (SROI) are both methods that can be used to quantify and compare the benefits and costs of social interventions.
There are two key steps in quantitative evaluation using CBA or SROI:
- Estimate the changes in outcomes caused by the intervention being evaluated, relative to a counterfactual scenario.
- Translate those changes into monetary values based on what society is willing to pay for them.
To do step two, we need estimates (in monetary terms) of the values of whatever changes in outcomes are relevant for the intervention being evaluated. Such valuations are not always easy to find, but the CBAx tool published by the NZ Treasury includes a handy database of impact valuation factors.
In the latest (December 2023) version of the model, there are 274 impact valuations across 12 domains of wellbeing. These include private impacts as well as external or spillover impacts. There are also government impacts for calculating changes in government revenues and expenditure, although some of these are transfers between different groups of society (e.g. welfare or superannuation benefits) and are not net social impacts.
If you want to learn more, I’ve created another brief guide and overview of the impact valuation factors in the CBAx tool with a little more detail on what these valuation factors are, how they are used, and the various types available in the tool.