Estimating the Costs and Benefits of Educational Testing Programs:
Estimating the Costs and Benefits of Educational Testing Programs
In the early 1990s, the Center for the Study of Testing, Evaluation, and Educational Policy (CSTEEP), at Boston College, calculated a "high" estimate of $22.7 billion spent on standardized testing per year. U.S. schools, the CSTEEP report claimed, suffer from "too much standardized testing" that amounts to "a complete and utter waste of resources." Their estimate breaks down to about $575 per student per year.
By Richard Phelps, Ph.D.
Economist
Education Consumers Consultants Network
Benefit-cost analysis is imbedded in all studies that ask the essential question of an activity, "Is it worth doing?" Benefit-cost analysis is a set of techniques, philosophy, and logic that can impose an order and rigor on the process used to answer the essential question.
The logic of benefit-cost analysis is that of the accountant's spreadsheet. Indeed, one could accurately describe it as economists' accounting method. The essential idea is to capture all relevant costs and benefits, broadly considered, on one sheet of paper and weigh them in the balance. If the enterprise or project shows more benefit than cost (i.e. net benefits are positive) it can be said to be economically worthwhile. It is assumed that the researcher will do an honest and responsible job of trying to capture all the relevant benefits and costs. If they can't be estimated with any precision, the researcher should at least enumerate them and leave it to the reader to estimate their value.
What one person considers a benefit, however, another person may not. Indeed, what one person considers a benefit, another person may regard as a cost. The details of benefit-cost analyses, then, are often subject to debate. It is, however, considered incumbent upon the researcher to properly identify what perspective she is adopting. Ideally, a benefit-cost analysis calculates the benefits and costs as they accrue to all of society - such is the nature of a social benefit-cost analysis. Anything less - an analysis that calculates benefits and costs for a sub-group - is a private benefit-cost analysis, and the researcher is obligated to explicitly declare it as such.
Benefit-cost analysis should be most welcome in education research. Benefit-cost analysis imposes a structure in which "the whole picture" gets considered. It provides a framework that can impose rigor and honesty onto evaluations that could otherwise be sloppy.
By the same token, most readers are probably also well aware of how benefit-cost analysis can be misused. A researcher can make unreasonable or dishonest estimates, ignore some relevant benefits or costs, and include some irrelevant benefits or costs, or double count. There can be a tendency among advocates to exclude or include benefits or costs according to their preferences.
What costs and benefits are relevant? Generally, they are the marginal costs or benefits that are attributable to the activity in question and not another activity. When someone argues that the cost of a test is X, the appropriate cost to cite is the marginal cost of the test, the cost that can be attributed to the existence of the test and
