When Is It Appropriate to Conduct Economic Analysis?
Types of Economic Analysis
Economic benefit is one of the impacts specifically mentioned in the IPM road map, and is also a key driver of IPM adoption. Therefore it is likely that some assessment of economic benefits will be a component of many IPM evaluation and impact studies. In these cases, where the financial impact is of direct interest, methods such as cost-benefit analysis and partial budget analysis will be useful. On the other hand, projects focused on other impacts (e.g. reduction in human health risk) might find cost-effectiveness analysis more useful. Working through the process of building a Logic Model for your evaluation will help with deciding whether measuring economic impacts is appropriate. Broadly, economic analysis can be characterized by:
- Allows you to quantify the results of changes in practice and behavior in a standardized way
- Helps you determine how much change is possible given available resources
- Helps you determine how changes you propose will impact the intended audience and whether your project will generate enough benefits to warrant sustained effort
- Deals with real world data, and so it is prone to measurement error that might affect your conclusions
- The need for data can make measuring economic impact expensive and time-consuming