POLICY EVALUATION AND CBA ES 9 Term paper

POLICY EVALUATION AND CBA ES 9 �Term paper guidelines revisited �Example of CBA

TERM PAPER ● 30% of total grade ● General principles – KISS – max 10 pages – Only relevant information – Fluent text – I dont have to look back, paragraphs follow logically, repeated reference to the main idea

Abstract 1 � This paper is focused on evaluation of costs and benefits of tunnel Blanka. In the introduction there is a brief history and basic overview of the project. Main part then goes through evaluation of specific benefits, which are supposed to be emission reduction, noise reduction, fuel consumption reduction and other social benefits as time savings. Several simplifications had to be made to make evaluation possible. For emissions we took Euro VI norm as a base and based on several articles we calculated probable emission levels during rush hours and normal hours. Monetary value of costs resulting from emissions are based on five significant health risks based on Máca, Melichar. For noise we took hygienic limits as a base and estimated costs for other possible solutions (noise barriers) of this problem. Source for this estimation was one phone-call with possible contractors. Fuel savings and its cost is based on average price of fuel in the Czech Republic and then included in total benefits for society as a whole. Cost of time savings are estimated from average salary. To evaluate costs of project we have two numbers at hand, construction costs and annual maintenance. Finally in the conclusion. Our research question is: „Did revenues from established tkb exceeds costs? “.

Abstract 2 �The study evaluates impact of raising tuition fees in England. To answer the question whether the increase in tuition fees from 2012/2013 affected the university participation, the difference-in-differences analysis between English and Welsh students is conducted. Results of this analysis show a reduction of 11% applicants in 2012 and a reduction of 4% applicants in 2015 compared to the pre-treatment level. The study also shows the expected results of the secondary method, regression discontinuity design, using the threshold of ₤ 25, 000 (or ₤ 42, 600) household income for receiving the financial aid in the case of Durham University.

Abstract checklist �Motivation – why do we care about the problem and the results �Problem statement – research question �What is the state of knowledge about this problem, why is your research important �Approach �Results �Conclusions

Statement of a problem �Main idea �Why important �Necessary background �Short note on methodology

Literature review �ALWAYS RELEVANT! �How related to your research question � Tuition fees page 5 �Do not write a summary of the works – just what is relevant �You can „list“ studies claiming opposing results „Evidence is mixed, A(1998), B (2009) and C(2010) claim that…. , while D(2010) and E(2011) prove the opposite.

Methodology and data �Methodology assumptions – do they hold? Prove it �Data – source, limitations, reliability �Limitations of approach, potential problems

Results and conclusions �As you will use two different methods – one applied fully, the other just described – you should include the (expected) results in the chapter of each method and then summarize in a final chapter of Conclusions (including policy implications, ideas for future research)

References �APA citation style!!! �http: //www. bibme. org/citation-guide/apa/ �In-text citations �https: //owl. english. purdue. edu/owl/resource/560/ 02/

Evaluation sheet CONTENT ORGANISATION Clear Well Relevant First statement of structur policy and Alternativ Limitatio Literatu Abstrac Referencin implement a problem ed, TOTAL backgroun e method ns re t g ed method and languag d conclusions e max. points 15 20 10 5 10 10 10 15 5 100

Example of evaluation study 12

Cost-benefit analysis of investing into Roma education 13 �Kertesi, G. , and Kezdi, G. (2006). Expected long-term budgetary benefits to Roma education in Hungary. Roma Education Fund Calculate direct financial benefits (to the national budget) of investing into Roma education Very narrow sense of social benefits - more education makes people contribute more to the national budget and/or receive less transfers from it Policy: extra investment (on top of existing pre-school and primary school financing) that enables a young Roma to successfully complete secondary school � This investment makes Roma children complete the maturity examination and opens the road to college, instead of stopping at 8 grades of primary school (or dropping out of secondary school)

Background: Educational attainment of Roma population and national average 14 Source: Kertesi and Kezdi (2006); Table 1.

Catalogue all benefits of the policy measure 15 �Seven channels which make up for the budgetary benefits from extra education of Roma children: personal income tax on income earned from registered full-time employment social security contributions paid by employers and employees on earned income unemployment benefits means-tested welfare benefits earning from public employment projects value added and excise tax on consumption incarceration costs

Estimates of life-time probability of employment 16 Note: Figure shows estimated probabilities of full-time employment for Roma by their level of education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Source: Kertesi and Kezdi (2006); Figure 2.

Estimates of life-time probability of unemployment 17 Note: Figure shows estimated probabilities of unemployment for Roma by their level of education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Source: Kertesi and Kezdi (2006); Figure 2.

Estimates of life-time probability of welfare receipt 18 Note: Figure shows estimated probabilities of welfare receipt for Roma by their level of education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Source: Kertesi and Kezdi (2006); Figure 2.

Estimates of life-time probability of incarceration 19 Note: Figure shows estimated probabilities of incarceration for Roma by their level of education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Source: Kertesi and Kezdi (2006); Figure 2.

Estimates of life-time per capita consumption 20 Note: Figure shows estimated consumption levels by the level of education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Source: Kertesi and Kezdi (2006); Figure 3.

Estimates of life-time per capita consumption of alcohol and tobacco 21 Note: Figure shows estimated alcohol and tobacco consumption by education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Source: Kertesi and Kezdi (2006); Figure 3.

Results: Life-time discounted budgetary contributions of one individual, by education 22 Note: Table shows estimated life-time discounted contributions (positive values denote contributions to national budget, negative denote budgetary costs) of one individual by education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Discounted to age 4, discount rate 2%. Source: Kertesi and Kezdi (2006); Table 5.

Results: Life-time discounted net contributions of one individual, by education 23 Note: Table shows total life-time discounted net contributions of one individual by education (A – elementary school, B – vocational training school, C – secondary school with maturity exam, D – tertiary). Discounted to age 4. Net benefit estimates compare contributions of individual with education A/B with individual who has with 50% probability education C and with 50% probability education D. Source: Kertesi and Kezdi (2006); Table 4.

Results 24 � The present value of the future benefits of an investment that makes one child successfully complete secondary school is about HUF 19 M (EUR 70, 000). � Sensitive to the discount rate, assumed wage growth, college completion rate, and race specific employment and wage differentials. � But even the most conservative estimates suggest that benefits are least HUF 7 M-9 M. � Costs? Have to take into account success probabilities of investment into further education For example, an investment increases the chance of secondary school completion by 20 percentage points. In that case, an investment of HUF 3. 8 M (19 M/5) or less per child investment would yield a positive net benefits.

Discussion 25 �They leave out important benefits: Old-age pensions, disability pensions, childcare benefits, and health care costs. But also personal benefits, positive externalities from higher educational attainment, … Including these and other channels would most likely increase the estimated benefits to educational investments. Their estimates are therefore most likely lower bounds for the expected budgetary benefits. �Strengths and weaknesses of this paper?