National cost-benefit analysis
National Cost-Benefit Analysis (NCBA) is a well-established and internationally recognised means for assisting social decision making. NCBA has been used by the World Bank since at least the 1950s and is often used by TDB Advisory in the present day. Cost-benefit analysis is applicable and useful in a truly wide range of contexts, as two of our recent reports illustrate.
The costs and benefits of a national tooth-brushing education programme for children
In a report TDB prepared for New Health NZ Inc, we undertook analysis of the value that could be placed on a tooth-brushing and education programme in New Zealand. Using Treasury’s 7% pre-tax real discount rate, we found the net present value (NPV) of the benefits and costs to equate to around positive $277 million over a 20 year horizon. The benefits are primarily avoided treatment costs, while the costs included staff, toothbrushes, toothpaste and other materials and supplies. In the report we use data from overseas dental programmes including ‘Childsmile’ in Scotland and the Danish ‘Nexø Method’ to simulate potential dental-health effects.
In the media:
Costs without benefits: A two-sided review of a one-sided analysis of gambling
In our report, commissioned by the Gaming Association of New Zealand, we present a critique of a Ministry of Health-commissioned study of gambling harm. The report by Central Queensland University (CQU) and Auckland University of Technology (AUT) entitled “Measuring the Burden of Gambling Harm in New Zealand” presented some highly questionable analysis of the harms of gambling, ultimately concluding that:
- low-risk gambling is worse for the gambler than the untreated amputation of a leg;
- problem gambling is worse for the gambler than terminal cancer or a severe stroke and nearly as bad as untreated AIDS; and
- at a national level, gambling causes three times the harm of drug-use disorders.
Upon reviewing the report, we found CQU/AUT’s conclusions to be the product of a number of flawed methodologies, including the decision to count costs without counting benefits and inflating the costs, While there can undoubtedly be harm from problem gambling, counting only one side of the equation runs the risk of misleading policy makers and mistargeting public policy.
Featured in The TDB Digest March 2020