School Operations

Assessment Model For Cost-Effectiveness

Pre-Analysis Stage

Several questions/issues need to be resolved before one conducts a cost-effectiveness analysis. Most of the issues in this phase revolve around the scope of the study in terms of outcomes, how the analysis is to be conducted and factors which may influence the study or the decision making process.

Problem Statement

  1. What is being studied and why?
  2. What is the program mission statement? What: For whom: Why:
  3. What are the specific measurable desired outcomes?
  4. What are the alternatives being considered?
  5. Is there support (Board, Administration, Staff, Community, etc.) to accept the findings of this study?
  6. What economic, political, and/or social factors may come into play which would impede or facilitate the study of this program?


  1. What are the laws/regulations/local policies for the program which are applicable to this study?
  2. How does the current program meet or exceed current Law and Regulations? If the program fails to meet or exceeds the current law/regulation - so state.

Data Collection/Analysis Stage

Cost-effectiveness analysis is data intensive. Data falls into one of two categories: Costs (Fiscal Resources) and Results (Outcomes). The goal is to analyze the data for all alternatives using consistent format.


  1. What are the costs associated with each alternative?
  2. Are there any outside revenues which affect costs?
  3. What are the cost differentials in terms of gross and net costs?
  4. Are there any other cost considerations?


  1. What measurable outcomes will each alternative produce relative to the derived outcomes?
  2. What are the strengths and weaknesses of each alternative?

Decision Stage

After the data has been collected and analyzed, the two sets (Costs and Results) need to be examined and a decision made which weighs program outcomes and costs according to one of the three types of cost-effectiveness as defined.

  1. Which alternative is the most cost-effective?
    Why? (Which area of cost-effectiveness does it meet?)
  2. Are changes necessary to meet legal requirements?
  3. Are there any recommended changes in law/regulations in order to improve cost-effectiveness?
  4. Are there future areas to be studied?
Last Updated: June 2, 2011