Cost-Effectiveness of Small Solutions

Imagine that you were shopping for a reliable new car, one that is proven to last an average of at least 100,000 miles with routine maintenance and repairs. You are looking at a number of options that fit your needs for around $24,000.

You happen to be talking to your neighbor, an economist, about your plans. “$24,000?” she says. “That’s crazy. You can get a motorcycle that would go at least 100,000 miles for only $12,000, and save a lot on gas as well!”blog_8-22-19_vessuv_500x333

You point out to your neighbor that motorcycles might be nice for some purposes, but you need a car to go to the grocery store, transport the kids, and commute to work, even in rain or snow. “Sure,” says your neighbor, “but you posed a question of cost-effectiveness, and on that basis a motorcycle is the right choice. Or maybe a bicycle.”

In education, school leaders and policy makers are often faced with choices like this. They want to improve their students’ achievement, and they have limited resources. But the available solutions vary in cost, effectiveness, and many other factors.

To help leaders make good choices, economists have devised measures of cost-effectiveness, which means (when educational achievement is the goal) the amount of achievement gain you might expect from purchasing a given product or service divided by all costs of making that choice. Cost-effectiveness can be very useful in educational policy and practice in helping decision makers weigh the potential benefits of each of a set of choice available to them. The widespread availability of effect sizes indicating the outcomes and costs of various programs and practices, easily located in sources such as the What Works Clearinghouse and Evidence for ESSA, make it a lot easier to compare outcomes and costs of available programs. For example, a district might seek to improve high school math performance by adopting software and professional development for a proven technology program, or by adopting a proven professional development approach. All costs need to be considered as well as all benefits, and the school leaders might make the choice that produces the largest gains at the most affordable cost. Cost-effectiveness might not entirely determine which choice is made, but, one might argue, it should always be a key part of the decision-making process. Quantitative researchers in education and economics would agree. So far, so good.

But here is where things get a little dodgy. In recent years, there has arisen a lot of interest in super-cheap interventions that have super-small impacts, but the ratio between the benefits and the costs makes the super-cheap interventions look cost-effective. Such interventions are sometimes called “nudge strategies,” meaning that simple reminders or minimal actions activate a set of psychological process that can lead to important impacts. A very popular example right now is Carol Dweck’s Growth Mindset strategy, in which students are asked to write a brief essay stating a belief that intelligence is not a fixed attribute of people, but that learning comes from effort. Her work has found small impacts of this essentially cost-free treatment in several studies, although others have failed to find this effect.

Other examples include sending messages to students or parents on cell phones, or sending postcards to parents on the importance of regular attendance. These strategies can cost next to nothing, yet large-scale experiments often show positive effects in the range of +0.03 to +0.05, averaging across multiple studies.

Approaches of this kind, including Growth Mindset, are notoriously difficult to replicate by others. However, assume for the sake of argument that at least some of them do have reliably positive effects that are very small, but because of their extremely small cost, they appear very cost-effective. Should schools use them?

One might take a view that interventions like Growth Mindset are so inexpensive and so sensible that what the heck, go ahead. However, others take some time and effort on the part of staff.

Schools are charged with a very important responsibility, ensuring the academic success, psychological adjustment, and pro-social character of young people. Their financial resources are always limited, but even more limited is their schoolwide capacity to focus on a small number of essential goals and stick with those goals until they are achieved. The problem is that spending a lot of time on small solutions with small impacts may exhaust a school’s capacity to focus on what truly matters. If a school could achieve an effect size of +0.30 on important achievement measures with one comprehensive program, or (for half the price) could adopt ten small interventions with effect sizes averaging +0.03, which should it do? Any thoughtful educator would say, “Invest in the one program with the big effect.” The little programs are not likely to add up to a big effect, and any collection of unrelated, uncoordinated mini-reforms is likely to deplete the staff’s energy and enthusiasm over a period of time.

This is where the car-motorcycle analogy comes in. A motorcycle may appear more cost-effective than a car, but it just does not do what a car does. Motorcycles are fine for touring in nice weather, but for most people they do not solve essential problems. In school reform, large programs with large effects may be composed of smaller effective components, but because these components are an integrated part of a well-thought-out plan, they add up to something more likely to work and to keep working over time.

Cost-effectiveness is a useful concept for schools seeking to make big differences in achievement, using serious resources. For small interventions with small impacts, don’t bother to calculate cost-effectiveness, or if you do, don’t compare the results to those of big interventions with big impacts. To do so is like bragging about the gas mileage you get on your motorcycle driving Aunt Sally and the triplets to the grocery store. It just doesn’t make sense.

This blog was developed with support from the Laura and John Arnold Foundation. The views expressed here do not necessarily reflect those of the Foundation.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s