1022 - Cost Analysis - How to Do It and How to Use It

Abstract Information: Understanding cost-economy analysis and cost-effectiveness analysis is crucial in the landscape of international development. Demand for these tools has surged due to USAID’s mandatory Automated Directives System (ADS) 201 requirement to use cost analysis with impact evaluations, alongside the emphasis placed by USAID’s chief economist on cost-effectiveness. This recognition among donors and practitioners underscores the importance of understanding cost-effectiveness for optimizing resource allocation and program effectiveness. However, there is a gap between this momentum and broader awareness of these methods, leading to confusion among many stakeholders regarding their purpose, results, and limitations. To address this gap, we have developed a professional development lecture to introduce and build awareness among new and experienced evaluators and practitioners. This session will offer an introduction to cost-economy and cost-effectiveness analysis, emphasizing their practical applications. Participants will explore the critical role of cost analysis in advancing sustainability and cost-effectiveness goals, gaining insight into industry-recommended processes and procedures for conducting thorough cost analyses. Through a blend of theoretical insights and practical exercises, attendees will develop an understanding of the tools, underlying data, and effective application of cost analysis processes. While participants will not emerge from the course as methodological experts in these tools, they will leave equipped as informed consumers of cost analyses. With years of experience teaching costing methods at USAID, with government officials, implementing partners, and graduate-level students, our course aligns with best practices and is designed to be hands-on and discussion-oriented for an engaging learning experience. Upon completion of this training, participants will walk away with a solid understanding of cost analysis principles and practical techniques. With this knowledge, they will be better equipped to contribute to evidence-based decisions around the use of scarce resources in international development.

Relevance Statement: Momentum is building within USAID and among evaluators for other donors for cost analysis. As this momentum accelerates, the demand for skilled practitioners adept in cost-economy and cost-effectiveness analysis is on the rise. Don’t miss out on the opportunity to be at the forefront of this movement! This professional development lecture is designed for donor staff and implementing partner staff who will be the main consumers of cost-economy and cost-effectiveness analysis, and likely also a major player in providing cost data. Evaluators who are less familiar with these methods will also benefit from this mini-course. This course is tailored to help consumers of cost-economy and cost-effectiveness analysis understand what these tools are, how they are constructed, what the results tell us, and why you should care. This is a hands-on course with real life examples from impact evaluations and other assessments in the development and humanitarian space. There will be controversy! There will be debate! And there will be evidence-based decision-making!