The Cost-Effectiveness Lab improves and scales the use of high-quality cost evidence in impact evaluation.

Cost evidence is essential for policymakers to decide how to allocate scarce resources across impactful programs. Yet, fewer than one in five impact evaluations integrates cost evidence—such as by including a cost effectiveness analysis (CEA) or cost-benefit analysis (CBA) of the evaluated program (Brown and Tanner, 2019). The lack of attention to costing from researchers limits the influence of impact evidence by making it less relevant to decision maker’s concerns. Moreover, a dearth of costing evidence inhibits policymakers’ ability to identify and implement the most efficient programs to solve development challenges. Beyond impact evaluations, robust costing data allows implementing organizations to identify efficiencies and optimize resource allocation across program activities.

The lack of cost evidence in international development is driven by gaps in both the supply and demand for cost data. A lack of experience and know-how often prevents researchers and implementing organizations from generating robust cost analyses. Additionally, funding for cost analyses is not always available, requiring researchers to pull from funds earmarked for impact evaluation. On the demand side, existing cost evidence is often maligned because of poor underlying data quality, lack of methodological rigor, and insufficient transparency in the reporting of methods and assumptions.

CEGA is excited to leverage our internal expertise and that of our partners to draw greater attention to cost-effectiveness research. A new engagement that advances this work is the Smart Buys Alliance, a consortium of global development actors that catalyzes cost-effectiveness analyses, evidence syntheses, and policy-relevant research—ultimately informing bilateral and philanthropic investments in the most effective and cost-effective solutions.

Discover more resources for systematic cost-effectiveness analysis.

Goals

CEGA’s Cost Effectiveness Lab aims to increase the production and use of robust cost analysis so that decision-makers can allocate scarce resources to the most cost-effective interventions.

To do this, the Lab improves the “market” for both producing and using cost data.

1. To encourage the production of cost evidence, the Lab aims to establish a costing center of excellence to convene researchers, develop open source tools and training, and establish best practice methods.
2. To increase the use of and demand for cost evidence, the Lab works with implementing organizations and funders to identify obstacles to the use of cost data, and to demonstrate its value to an organization’s goals when done correctly.

Activities

• Generating Cost Evidence: The Lab designs and implements rigorous, highly granular, costing studies in collaboration with impact evaluation research teams working in a variety of geographies, sectors, and scales.
• Creating Transparent Tools and Frameworks for Costing: The Lab develops and field tests open source tools and frameworks for rigorous and transparent costing. These include a costing pre-analysis plan tool to facilitate research collaboration on impact evaluations, and virtual workbooks to transform accountancy data into analytical datasets.
• Building Research Capacity: The Lab has developed short courses and trained dozens of visiting fellows and PhD development economists in general principles, and practical tools of cost evaluation. We also use a “learning by doing” approach to partner with research institutes in cost data collection on randomized evaluations.
• Empowering Consumers of Cost Evidence: The Lab works with consumers of costing evidence–including both private and public funding organizations–to advise on the use of cost evidence in the evaluation of individual and portfolio investments to develop strategies to better incorporate cost analysis into funding decisions. CEGA works to change funding and publishing norms, taking inspiration from the Berkeley Initiative for Transparency in the Social Sciences (BITSS), which has helped drive adoption of open science practices (e.g. pre-analysis plans) by working closely with journals and funders.
• Synthesizing Existing Costing Data: The Lab develops and applies risk of bias tools to evaluate the quality of cost evidence reported in past evaluations, and undertakes comparative cost-effectiveness analysis for systematic reviews of development interventions.
• Convening Experts and Serving as Hub for Cost: CEGA builds field-level collaboration through our Costing Community of Practice (CCoP) and develops tools that make it easier and more efficient for research teams to collect and report primary cost data in the context of conducting an impact evaluation. CEGA disseminates updates on the cost evidence ecosystem through written outputs (see “How donors can support the development of cost evidence in impact evaluation research“) and events like the Cost-ober webinar series (see full recordings of our 2020 and 2021 events).