Exercise 2: CBA Evaluation

Five years ago a community college district established programs in ten new vocational fields. The district now wants to phase out those programs that are not performing successfully and retain those programs that are performing successfully. To determine which programs to drop and which to retain, the district decides to perform CBAs.

 

(a) What perspective or perspectives should be used in the studies? Are there any issues concerning standing?

 

(b) Using a stylized cost-bene t framework table, list the major benefits and costs that are relevant to the district's decision and indicate how each affects different pertinent groups, as well as society as a whole. Try to make your list as comprehensive as possible, while avoiding double counting.

 

(c) What sort of evaluation design should the district use in conducting its CBAs? What are the advantages and disadvantages of this design? Is it practical?

 

(d) Returning to the list of benefits and costs that you developed in part b, indicate which of the benefits and costs on your list can be quantified in monetary terms. How would you treat those benefits and costs that cannot be monetized?

 

(e) What sort of data would be required to measure those benefits and costs that can be monetized? How might the required data be obtained?

The perspectives of interest that should be used in studies are those of students and taxpayers as well as society as a whole. However, a relevant issue concerning standing is whether former students should be given standing in the CBAs as they are residing outside the community college district at the moment.

Step-by-step explanation

There are quite a number of the alternative cost-benefits framework that ought to be developed. The framework below is just a suggestive cost-benefit framework.

                                                           Students        Social             Taxpayers

Benefits.

Fringe benefits.                                             +         +                                 0

After tax earnings                                           +         +                                 0

Psychic Benefits                                            +         +                                 0

Tax Payments                                                0         +                                 0

Costs

Tuition and fees                                             -          -                                  0

Psychic Costs                                                 -          -                                  0

Foregone fringe benefits                                -          -                                  0

    The use of experimental design would probably not be feasible in this case. Students should not be limited to selecting any vocational program that they might desire. The nonexperimental design should be employed but the major problem with this would be finding an appropriate control group. As a result, the best available control group would be high school graduates who did not go to either two-year or four-year colleges. These people are however ought to differ from the community college students in terms of drive, ability as well as motivations.

    Getting data on earnings would probably require that both previous graduates and current graduates of each program as well as members of the control group be contacted and interviewed as expensive undertakings. Information about tuitions, gifts, fees, and school tax support could probably be obtained from school administrative records as it would be relatively easy.

Psychic benefits and costs probably cannot be monetized and it is also difficult to obtain good interview data on fringe benefits. As a result, qualitative CBAs should be considered.