Abstract
The economic evaluation of psychosocial interventions is a growing area of research. Though time costs are central to the economist’s understanding of social costs, these costs generally have been ignored by prevention scientists. This article highlights the need to measure such costs and then reviews the principles economists use in valuing time. It then considers the specific time costs that often arise in interventions designed to reduce behavior problems among children and youth. These include classroom time devoted to program activities, the time of parents or other caregivers, the time of teachers (outside of the classroom), and the time of volunteers. We consider the economic principles that govern how economists value these inputs and then apply these principles to data from an evaluation of a prominent intervention in the field, the Incredible Years Program. We find that the time costs are potentially rather large and consider the implications for public policy of ignoring them.
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Notes
Especially when those budgets are organized at the start of the study in a way that allows one to attend to key tasks in the costs analyses, such as separating the costs of research from service or intervention delivery. See Foster and Jones (2003).
As will become apparent, the size of these costs depends on several hypothetical considerations. For example, the marginal costs of educating a disruptive student may depend on his/her effect on other students.
The field of labor economics devotes an enormous amount of research to the implications of taxes for labor markets. A focus of that literature is on tax incidence. This research suggests that even though employers nominally pay payroll taxes, those taxes are really borne by workers in the form of lower wages. Furthermore, that literature reveals that payroll taxes create additional costs for society because individuals affected likely reduce their work hours. As a result, the social costs of the tax likely exceed revenues generated. This net effect is known as a “welfare loss.”
Typically, economists include fringes in calculating the value of time.
These authors base this measure on the value of time collected as part of transportation studies. They recommend valuing all time at this level.
Societal costs would also include any (net) inconvenience in instances where the parent is able to switch hours with another worker. In that case, the costs to society would involve the value of leisure lost by the parent as well as any inconvenience to the other worker.
This assumes the intervention is not so large that it influences the price of child care itself. See Zerbe and Dively (1994).
If we were to consider a third perspective, it would be that of participants. The costs to them include their travel and time costs, with the latter being partially offset by payments for participation and the provision of free child care. For the most part, the available information is provided in the tables under the social perspective.
These participants represented 75% of the 51 families eligible for participation in this cohort. Families were eligible for the study on the basis of Kindergarten teacher ratings of children’s disruptive behavior in the classroom.
One might measure and treat these costs as one would a fixed asset. This would be the case if leaders would have to be replaced over time. In that case, the cost of training the leaders would be amortized over their expected “lifetime” on the project.
Post-tax income was calculated as the amount of income received after withholding. The Human Resources Office at ORI calculate this figure for the project. We assumed the teacher was married, and her husband earned the same salary. Our hypothetical couple had two children.
Oregon is one of 11 states nationally with a minimum wage that is higher than federal levels. For the project period of this study, the rate was $7.05 per hour.
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Acknowledgements
This research was supported by grant #RO1-DA12202 from the National Institute on Drug Abuse. We also would like to thank Ryann Crowley for expert research assistance and Carol Metzler for excellent editorial suggestions.
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Appendix: Conceptual Basis for Time Costs
Appendix: Conceptual Basis for Time Costs
Participant | Treatment tradeoffs | Circumstances | Perspective Societal perspective = sum of all three | ||
|---|---|---|---|---|---|
Participant | Employer | Others (such as taxpayers) | |||
Child | Child learning is reduced | Lost (net) future earnings | NA | Lost tax revenues + other social benefits | |
Child learning is not reduced | None | NA | None | ||
Parent | Parent loses leisure time | Value of foregone leisure | None | Same | |
Parent misses hourly paid work | Parent is unable to make up time | Net wage lost | Friction costs related to replacing worker; or lost production | Difference between pay and value of leisure for replacement worker | |
Parent is able to make up time | Value of foregone leisure | Related friction costs | None | ||
Parent misses work and is salaried | Parent is unable to make up time | None | Value of lost output | Reduced tax revenues | |
Parent is able to make up time | Value of foregone leisure | Related friction costs | None | ||
Teachers | Teacher loses leisure time | Value of foregone leisure | None | None | |
Volunteers | Volunteers reduce time donated to other activities | None | NA | Value of foregone activities | |
Volunteers reduce their leisure time | Value of foregone leisure | NA | None | ||
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Foster, E.M., Johnson-Shelton, D. & Taylor, T.K. Measuring Time Costs in Interventions Designed to Reduce Behavior Problems Among Children and Youth. Am J Community Psychol 40, 64–81 (2007). https://doi.org/10.1007/s10464-007-9125-0
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DOI: https://doi.org/10.1007/s10464-007-9125-0