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Evaluating the Policy

Identifying Costs

Costs are consequences of a policy that are bad or negative for the society or some parts of the society. Some costs are tangible and easy to measure in dollars or numbers. Examples may include that a policy:

  • Increased the taxpayers $1,000,000
  • Increased auto deaths by 20%
  • Decreased the graduation rate by 7%
Some costs are intangible and harder to measure. Security cameras in a parking garage may make people feel they have less privacy. Some school policies can decrease student morale.

Costs have the same sources as benefits:

  • The action itself
  • The intended consequences of the policy
  • The unintended consequences of the policy
Suppose a new gas tax is enacted to deal with the social problem of a shortage of oil. A new gasoline tax costs the consumer more money to buy gas. Therefore, the action itself is a cost. The intended consequence of the gas tax may be to lower consumption. That means that motorists may have to eliminate unnecessary travel. That is a negative effect that is intended by the policy. There may also may some unintended long term costs of a gas tax. The tourist industry contains attractions that require people to drive great distances to visit. Those attractions will suffer and may have to cut jobs. That would be an unintended cost of the gas tax.

Worksheet6: "Identifying Costs"(HTML Version)
Worksheet6: "Identifying Costs"(MSWORD Version)

Example

Do A Comparative Analysis (optional)
Using the Internet to Gather Data on Benefits and Costs