How is the cost-effectiveness ratio for a program computed?
A)divide the operating expenses by the client revenues
B)run a t-test to determine significant differences between costs across years of operation
C)divide the total cost of the program by the effectiveness outcome indicator
D)compute the amount saved by providing services compared to societal costs if services were not available
E)none of the above, cost-effectiveness is a subjective measure when studying human services programs

Question

Quizplus · Accepted Answer

The cost-effectiveness ratio is computed by dividing the total cost of the program by the effectiveness outcome indicator. This calculation provides a measure of how much it costs to achieve a specific outcome, which can be useful in evaluating the efficiency of a program. Dividing operating expenses by client revenues (A) would provide a measure of profitability, but not cost-effectiveness. Running a t-test (B) would not be relevant for calculating cost-effectiveness. Option D is more relevant to cost-benefit analysis rather than cost-effectiveness. Option E is not true as cost-effectiveness is a widely used measure in human services program evaluation.

How Is the Cost-Effectiveness Ratio for a Program Computed