Introduction to impact evaluation and cost-benefit analysis


Rigorous impact evaluation is the foundation for good policymaking: if we don’t know the impact of a policy on its desired objective (e.g. the effect of labour market policies on employment or the effect of environmentally friendly transport on pollution), it is very difficult to evaluate whether achieving the goal is possible or which way to achieve it is most effective. It is important to keep in mind that all impact evaluations entail uncertainty, sometimes to such an extent that the results are not usable in practice. It is crucial that this uncertainty is reflected in the analysis. Since all further financial calculations are based on the estimate of the causal relationship, a key component in impact evaluation is the identification of the substantive effect and the correct interpretation of uncertainty. We thus focus on that particular topic as one of the most important topics in the first part of the training.
After the impact has been identified, it has to be evaluated in a financial, or cost-benefit framework. We consider this as one of the most effective frameworks for comparing the benefits from a policy measure with its investment and costs, and evaluating its overall financial profitability. The financial framework is indispensable if one wishes to evaluate the impacts of the policy measure in in the context of budget planning. In the course, we will explore this closely, using two practical analyses (a labour market measure and an infrastructure investment project) as examples.
The course is 8 academic hours or a full workday, including breaks. Upon successful completion of the course, the participants receive a diploma.