# Universal cost-effectiveness calculator

Oct 11 20205 min read 0

# 22

October 4, 2021 update:

Draft form for any organization to use. The idea is to consult organizations with increasing impact strategy (e. g. systemic change, geographical reach, (possibly, in some cases) species coverage, funding impact counterfactuals). Feedback welcome.

October 30 update:

ImpactMatters's output-specific calculators step the below effort a few levels up. On the linked page, select any Guide to Calculating Impact and then Calculation Template.

If you are interested in a few-additional-orders-stepped-up-effort, enrolling more than 100,000 charities in counterfactual cost-effectiveness calculation program, volunteer for the Charity Navigator Impact Unit.

October 23 update:

Implementing recent feedback, I am highlighting the formula used:

A: Unit of the program's outcome

B: Number of units that the program provided

C: What % of units would have been provided even without the program? (% estimate of the counterfactual)

D: What has to be sacrificed and by whom to provide one unit of outcome? (opportunity cost per unit outcome)

E: Program cost

## {Program cost/[(100% - counterfactual %) × # of units provided]}+opportunity cost.

The units are ([currency] + [value units]) per [unit of outcome].

If the opportunity cost value is expressed in monetary terms of the same currency as the program cost, the units are [currency] per [unit of outcome].

# Summary

I made a draft of a universal cost-effectiveness calculator. It should calculate the counterfactual cost-effectiveness of any project, using values of any certainty (from past program and non-intervention data to the estimates of emerging project innovators. The idea is to make an online version that can record entries and refer users to resources that can increase their project effectiveness. In this way, 1) anyone will have access to data on the potential cost-effectiveness of projects that seek different outcomes. This can expedite innovation of the EA system. 2) Decisionmakers will be more likely to engage with EA, as they would directly benefit from the resources on improving their project cost-effectiveness.

I will much appreciate any feedback. Please also let me know if you would be interested in working with me on this project (esp. advising and coding) – if the community considers the project useful.

# Calculator fields with sample answers

Note: Low estimates are always the lowest values that you believe are reasonably possible; high estimates highest values that you believe are reasonably possible.

## General information

What outputs does your organization provide?

Outputs are anything that is used as means to achieve the intended results. Examples of outputs include clinic consultations (used as means to improve health) and textbooks (used as means to improve learning outcomes). These are just examples. Any outputs are considered.

Taking children to school

What outcomes does your organization aim for?

Outcomes are the end goals of programs. Examples of outcomes include improved health and any learning outcomes (e. g. improved test scores). These are just examples. Any outcomes are considered.

Attendance

What unit of outcome will be considered in this calculation?

This has to be a quantifiable measure and will be the reference unit value used anywhere else in this calculator. For example, you may be looking at 1 quality-adjusted life year provided (to quantify a health outcome) or a 1 point improvement of a test score (to quantify a learning outcome).

One year of schooling

Yes

## Outcome estimates

What time period during which a program ran/is proposed to run will be considered in this calculation?

Number 1 Unit Year

How many units of outcome were/should be achieved with your program in place during the above specified time period (best estimate)?

1000 × One year of schooling

ditto low estimate

ditto high estimate

How did you arrive at the above 3 estimates of units of outcome provided? (e. g. program coordinator estimate, average of some number of colleagues, link to calculations workbook, literature links,...)

Project reports: 1000 children were taken to school by our volunteers in 2019, for the entire school year.

What % of outcome would the intended beneficiaries achieve even without the program (best estimate)?

For example, the beneficiaries may purchase an output to achieve the same outcome themselves, another organization may run programming to provide the outcome, or the outcome may happen anyway, 'by itself.'

Specifically, for example, the beneficiaries would have acquired 80% of the quality-adjusted life years because they would have traveled to a paid healthcare facility (even without a program that provides free healthcare in local communities). Or, students would achieve 20% increase in their test scores anyway (for every 5 point increase with the program, 1 point would have happened anyway), even without the program, as they progress in their learning.

5%

ditto low estimate

ditto high estimate

How did you arrive at the above 3 estimates of % of outcome that the intended beneficiaries would achieve even without the program? (e. g. program coordinator estimate, average of some number of colleagues, link to calculations workbook, literature links,...)

There is no one else to take the children to school. In villages where we do not operate, maybe only 5% of the children that our program would target would go to school. This is an organization employee estimate.

## Opportunity cost estimates

If someone else must work to achieve one unit of output if your organization does not run the project, who is it what do they sacrifice (best estimate)?

For example, if one must travel to a paid healthcare facility that is far away, for one quality-adjusted life year, they would sacrifice 4 USD in business earnings, 3 USD in travel expenses, and 10 USD in treatment expenses, so total of 17 USD. Another example is that if a volunteer gives their old textbooks that they would not sell to a child that achieves 1 point increase in test scores, then the volunteer sacrifices nothing. Please specify what is sacrificed in order to provide one unit of outcome and who sacrifices it.

The volunteers who take the children to school sacrifice nothing; they do it in their free time.

ditto low estimate

ditto high estimate

How much did the program cost/is proposed to cost for the time period specified in the "Outcome estimates" section above?

Number 875000 Currency unit INR

What is the USD/your currency exchange rate?

How many of your currency units purchase 1 US dollar?

72.96 INR purchase 1 USD.

Comments on opportunity cost estimates (optional)

## Results

The direct cost-effectiveness of your program is:

875 INR per One year of schooling

11.99 USD per One year of schooling

The counterfactual cost-effectiveness of your program is:

Counterfactual: considering what would have happened even without the program.

921.05 INR per One year of schooling but The volunteers who take the children to school sacrifice nothing; they do it in their free time.

12.62 USD per One year of schooling but The volunteers who take the children to school sacrifice nothing; they do it in their free time.

See how you compare to other programs:

The Life You Can Save Calculate Your Impact

Do you think that the cost-effectiveness of your program is competitive?

Like these cost-effectiveness calculations?

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