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Session Title: New Tools for Cost Benefit Analysis Derived From old Much-Neglected Concepts and Equations
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Panel Session 662 to be held in Avila A on Friday, Nov 4, 1:35 PM to 2:20 PM
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Sponsored by the Costs, Effectiveness, Benefits, and Economics TIG
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| Chair(s): |
| Georg Matt, San Diego State University, gmatt@sciences.sdsu.edu
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| Abstract:
This short panel will present some new ideas derived from the seven decades old equation of Brogden in estimating the monetary impact of an intervention. Unfortunately the equation could not be applied until Schmidt and Hunter proposed an estimate of the standard deviation of productivity. We added two new ideas:
1) How to compute the effect size at the break-even point and estimate ROIs capitalizing on effects from evidence-based program an from meta-analysis
2) How to compute the necessary effect size to outperform the ROI of a competing program.
These tools also help in reducing many anxieties related to evaluation.
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The Effect Size at the Break-Even Point and the Estimation of the Return on Investment: A Powerful Tool for Evaluating Programs Ex Ante and Ex Post
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| Werner Wittmann, University of Mannheim, wittmann@tnt.psychologie.uni-mannheim.de
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| Andres Steffanowski, University of Mannheim, andres@steffanowski.de
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The Brogden-Cronbach-Gleser cost benefit equation popularized by Hunter and Schmidt can be used to compute the effect size of a program at the break-even point, where cost and benefit are on par. Such an effect is the minimum an intervention must demonstrate. It can be computed ex ante, long before a program is to be implemented.
A real effect size from an intervention can be used and related to the break-even effect to estimate the return on investment. When we know the estimated ROI from a competing intervention one can ex-ante compute from such an ROI and the break-even effect the minimal real effect size an intervention must surpass to outperform a competitor.
These tools are not well known despite their developments being already seven decades old. We applied them to selected areas and concluded that the economic impacts of many psychological interventions are heavily underestimated by all of us
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Why we Should not be Afraid of "Virginia Woolf": Oops we Mean Cost-Benefit Implications of Psychological Interventions!
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| Andres Steffanowski, University of Mannheim, andres@steffanowski.de
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| Werner Wittmann, University of Mannheim, wittmann@tnt.psychologie.uni-mannheim.de
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Psychological interventions have a shorter history than those from many others areas especially those from the hard sciences. Psychology is often under the threat of being labeled as a soft science. Many believe that investments in programs derived from evidence of the soft sciences are not competitive in terms of the ROI. We use information from large scale program evaluation studies in stationary and ambulatory psychotherapy out come studies we did in Germany to demonstrate what a myth such a statement is and that not investing in tehm leads to dramatic opportunity costs.
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