Measuring Efficiency/The Social Context of Evaluation

Abstract

The following discussion provides a brief overview of measuring efficiency. Key concepts in efficiency analysis are covered by three types of studies: ex ante and ex post efficiency analyses, cost-benefit and cost-effectiveness analyses, and the use of efficiency analyses. Conducting Cost-benefit analyses covers assembling cost data, accounting perspectives, measuring costs and benefits, comparing costs to benefits, and ex post cost-benefit analysis. To sum up this section, conducting cost-effectiveness analyses is conferred. The social context of evaluation covers the social ecology of evaluations and the profession of evaluation. Evaluation standards, guidelines, and ethics are discussed along with the utilization of evaluation results. This essay covers chapters eleven and twelve of the course textbook.

Measuring Efficiency

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From impact assessments to interpreting and analyzing program effects, the journey of program evaluation would be useless unless there is some value of efficiency during an evaluation. Between costs and outcomes, each decision within a program requires judgement cost-benefit analyses and cost-effectiveness analyses. These key concepts in efficiency analysis can be viewed as the conceptual perspectives and as sophisticated technical procedures (Rossi, Lipsey, & Freeman, 2014, p. 334). Efficiency analyses provide a comparative perspective on the relative utility of interventions. In essence, the dollar benefits provide justification of a program. Efficiency analyses are started by either ex ante efficiency analysis (analysis taken prior to program implementation) or ex post efficiency analysis (analysis taken after a program’s outcomes are known. Ex ante cost-benefit analyses are most important for programs which will be difficult to abandon once they have been put into place or that require extensive commitments in funding and time to be realized. The focus of these assessments relies on the examining of the efficiency of program in absolute or comparative terms. In absolute terms, the idea is to judge whether the program is worth the costs; in comparative terms, the issue is to determine the differential profit of one program compared to another program (Rossi, Lipsey, & Freeman, 2014, p. 339).

Cost-benefit and cost-effectiveness analyses encourage evaluators to become knowledgeable about program costs; however, in contrast, programs are noticeable to many stakeholders for acceptance and modification. Cost-benefit analysis requires estimated of the benefits of a program, both tangible and intangible, and estimates of the costs of a program, both direct and indirect (Rossi, Lipsey, & Freeman, 2014, p. 339). An important advantage of formal efficiency studies gathers information about costs in relation to outcomes. An underlying principle is that cost-benefit analysts attempt to value both inputs and outputs. Cost-effectiveness analysis is more of an appropriate technique which requires monetizing only the program’s costs; its benefits are expressed in outcome units.

Efficiency analyses are useful to those make policy decisions regarding the support of one program over another, or who need to decide in absolute terms whether the outcomes of a program are worth its costs. Efficiency analyses also provide those required to review the utility of programs at different points in time (Rossi, Lipsey, & Freeman, 2014, p. 341). Conducting cost-benefit analyses uses sources of cost data which include agency fiscal records, target cost estimates, and cooperating agencies. Benefits and costs must be defined from a single perspective because mixing points of view results in confused specifications and overlapping or double counting (Rossi, Lipsey, & Freeman, 2014, p. 345). Three accounting perspectives include individual-target accounting, program sponsor accounting, and communal accounting.

Measuring costs and benefits raise two distinct problems. The first is identifying and measuring all program costs and benefits. The second problem is the difficulty of expressing all benefits and costs in terms of monetary units (Rossi, Lipsey, & Freeman, 2014, p. 352). Five frequently used approaches are utilized in monetizing outcomes: money measurements, market valuation, econometric estimation, hypothetical questions, and observing political choices (Rossi, Lipsey, & Freeman, 2014, pp. 353-354). All relevant components must be included if the results of a cost-benefit analysis are to be valid, reliable, and reflect fully the economic effects of a project. Shadow prices reflect actual market prices, the real costs, and benefits society. Because resources are generally limited, the concept of opportunity-costs can be measured by the worth of predetermined options which are one of the controversial areas in efficiency analyses. Secondary effects may be difficult to identify and measure, should they be incorporated into the cost-benefit calculations. The basic means of incorporating equity and distributional considerations in a cost-benefit analysis involves weights whereby benefits are valued more if they produce an anticipated positive effect (Rossi, Lipsey, & Freeman, 2014, pp. 356-357). Discounting consists of reducing costs and benefits that are dispersed through time to a common monetary base by adjusting them to their present value. The use of cost-benefit analysis can also be used in comparing the efficiency of different programs.

A comprehensive evaluation rests on uncertain assumptions and be of limited utility. Optimal fundamentals of an ex post cost-benefit analysis of a program include several prerequisites which include: the program should have independent or separable funding; the program is beyond the development state and it is certain that its effects are significant; the program’s impact and the magnitude of that impact are known or can be validly estimated; benefits can be translated into monetary terms; and decisionmakers consider alternative programs, rather than simply whether or not to continue the existing project (Rossi, Lipsey, & Freeman, 2014, pp. 361-362).

Finally, conducting const-effectiveness analyses allows evaluators to compare the economic efficiency of program alternatives, even when the interventions are not aimed at common goals. In contrast to cost-benefit analysis, cost-effectiveness analysis does not require that benefits and costs be reduced to a monetary unit. The effectiveness of a program is related to the value of the costs. In cost-effectiveness analyses, programs with similar goals are evaluated and their costs are compared. Efficiency is judged by comparing costs for units of outcome. Cost-effectiveness analysis allows comparison and rank ordering of programs in terms of various inputs required for different degrees of goal achievement (Rossi, Lipsey, & Freeman, 2014, p. 363). Cost-effectiveness analysis is a good method for evaluating programs with similar outcomes without having to monetize the outcomes.

The Social Context of Evaluation

With all that has been covered in the topic of program evaluation, there are social and political concerns involving the context of evaluation activities. Basic research is typically initiated to satisfy the intellectual interests of the investigations and their aspirations to contribute to the knowledge base of a substantive area of interest to themselves and their peers. Researchers are trained in a single disciplinary orientation to which they remain committed throughout their careers. Although concerns about ethics and professional standards are important in both basic and applied research, they appear larger and are of greater societal importance in applied work.

The social ecology of evaluation covers evaluators and their need to continually assess the social ecology of the arena in which they work. Evaluation activities are initiated in response to requests from managers and supervisors of various operating agencies and focus on administrative matters specific to those agencies and stakeholders (Rossi, Lipsey, & Freeman, 2014, p. 373). Two essential features of the context of evaluation are recognized as the existence of multiple stakeholders and the related fact that evaluation is usually part of a political process. When having multiple stakeholders, evaluators find that a diversity of individuals and groups have an interest in their work and its outcomes. As mentioned in several chapters, evaluators must understand their relationships to the stakeholders. However, there are consequences to having multiple stakeholders. Evaluators must accept that their efforts are but only one input into the political process from which decisions and actions occur as a result. Strains invariably result from the conflicts in the interests of these stakeholders which, the strains can be eliminated by planning for them (Rossi, Lipsey, & Freeman, 2014, p. 375). Another source of strain is the misunderstanding of difficulties in communicating with different stakeholders based off vocabulary evaluation. Evaluators are advised to anticipate the communication barriers in relating to stakeholders.

Dissemination portrays critical responsibility of evaluation research. Evaluators ae encouraged to learn a secondary disseminator which refers to the communication of results and recommendations that emerge from evaluations in ways that meet the needs of stakeholders which are opposed to primary dissemination, detailed findings of an evaluation to sponsors and technical audiences (Rossi, Lipsey, & Freeman, 2014, p. 381). Political processes and evaluation have important social consequences which are determined in a democratic society; whereas, there has to be a balance of a variety of interests. Basically, the evaluator’s role is that of an expert witness, testifying to a degree of a program’s effectiveness and strengthening that evidence with pragmatic based information.

Evaluators frequently encounter pressure to complete their assessments more quickly than the best methods permit. This strain makes it difficult to undertake timely studies for planners and researchers. It is important that evaluators anticipate the time demands of stakeholders and avoid making unrealistic time commitments. A strategic approach is to confine technically complex evaluations to pilot or prototype projects for interventions that are unlikely to be implemented on a large scale in the future (Rossi, Lipsey, & Freeman, 2014, p. 386). The tension caused by the disparities between political and research time will continue to be problematic in the employment of evaluation for policymakers and project managers.

The profession of evaluation is implied that a person can perform evaluations as an assistant action; however, evaluators are required to be highly trained and have years of experience conducting and practicing evaluation activities. Essentially, evaluation is described as not being a profession. Multidisciplinary consequences, too often, result graduate training of evaluators are recognized as non-disciplinary despite the clear need (Rossi, Lipsey, & Freeman, 2014, p. 396). Other evaluators take a route through training courses or school certifications. The amount of technical training that can be obtained in courses is limited. Evaluators-in-training must take as many opportunities for additional learning of technical skills while pursuing an evaluation career.

The leadership role of evaluation is merely professional. Two major efforts include the program evaluation standards and guiding principles for evaluators. The guiding principles set out five general principles: systematic inquiry, competence, integrity, respect for people, and responsibilities for general and public welfare (Rossi, Lipsey, & Freeman, 2014, p. 405). Leadership requires evaluators to set high standards and practice the standards in which they apply them when conducting evaluations.

Utilization of evaluation results conventionalizes three-way classification of the ways evaluations are used. First, evaluators prize the direct utilization by documented and specific use of evaluation findings by decisionmakers and other stakeholders. Second, evaluators value conceptual utilization through evaluation influence. Third, persuasive utilization incorporates the enlisting of evaluation results in efforts either to support or to refute political positions through defending or attacking the status quo (Rossi, Lipsey, & Freeman, 2014, p. 411). Conceptual uses of evaluations often provide important inputs into policy and program development and should not be compared with the final output of less than perfection (Rossi, Lipsey, & Freeman, 2014, p. 412). Variables affecting utilization appear as relevance, communication between researchers and users, information processing by users, plausibility of research results, and use involvement or advocacy (Rossi, Lipsey, & Freeman, 2014, p. 414). The guidelines for maximizing utilization are encompassed by five rules: evaluators must understand the cognitive styles of decisionmakers; evaluation results must be timely and available when needed; evaluations must respect stakeholders’ program commitments; utilization and dissemination plans should be part of the evaluation designs; and evaluations should include an assessment of utilization (Rossi, Lipsey, & Freeman, 2014, pp. 414-416).

Finally, the future of evaluation rests on the support of decisionmakers, planners, project staffs, and target participants which increasingly become skeptical of common sense and conventional wisdom as sufficient bases on which to design social programs that will achieve their intended goals (Rossi, Lipsey, & Freeman, 2014, p. 418). The development of knowledge and technical procedures in the social sciences has encouraged the growth of evaluation. The refinement of sample survey procedures has provided an important information-gathering method along with advances in measurement, statistical theory, and substantive knowledge in the social sciences. The changes in the social and political climate bring constant challenges to evaluation practices which bring insistence to the communal and personal problems which require protective measures and reconstruction of social institutions.

Reference

1. Rossi, P. H., Lipsey, M. W., & Freeman, H. E. (2014). Evaluation: A Systematic Approach (7th ed.). Los Angeles, CA: Sage. pp. 331-421.

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