Cost Analysis in Educational Decision Making: Approaches, Procedures, and Case Examples. Working Paper No. 2005-1.

In an era of increasing demands for education reform that is both scientifically based and cost-effective, cost analysis has become an important decision-making tool. In their review of the applications of cost analysis methods in education, Hummel-Rossi and Ashdown (2002) presented a compelling rationale for the increased use of these evaluative strategies. First, in an era of governmental downsizing and streamlining, educators’ lobbying for additional funds and materials to increase student achievement needs to be supplemented with data that demonstrate the efficient utilization of these resources in achieving desired results. In addition, as education policymakers and administrators are increasingly confronted with dwindling resources, they will need more detailed information to determine which programs and policies will give them the biggest return on their investments. School psychologists are increasingly being called upon to evaluate the effectiveness of school-based programs and services (Illback, Zins, & Maher, 1999), and cost analysis provides a powerful methodology for this task. Moreover, cost analysis methods have an important role to play in the work of the Task Force on Evidence-Based Interventions (EBIs) in School Psychology (Kratochwill & Stoiber, 2000). Increasingly, school psychology research on prevention and intervention will need to report not only