Public Policy Analysis

User Generated

ebqevxb

Business Finance

Description

Week 7 Discussion 1

"Monitoring Observed Policy Outcomes" Please respond to the following:

  • Discuss the relationship between ill-structured problems and approaches to monitoring. Then, describe a real or hypothetical problem and recommend at least one effective way to monitor the policy outcomes. Support your position.
  • Use at least two threats to validity and develop a rebuttal to two of the following statements: (a) The greater the cost of an alternative, the less likely it is that the alternative will be pursued. (b) The enforcement of the maximum speed limit of 55 mph increases the costs of exceeding the speed limit. (c) The mileage death rate fell from 4.3 to 3.6 deaths per 100 million miles after the implementation of the 55-mph speed limit. (Refer to Figure 6.13 before responding.)


Week 7 Discussion 2

"Monitoring through Experimentation" Please respond to the following:

  • Assume you are the program chair of an employment program for students who did not graduate high school but earned a GED (Government Equivalency Degree). You have limited resources and want to determine the factors that ensure students succeed in their jobs. Explain to the program director how the “tiebreaking” experiment might allow the program to uncover that information.


Week 7 Assignment 3 Submission

Click the link above to submit your assignment.

Students, please view the "Submit a Clickable Rubric Assignment" in the Student Center.
Instructors, training on how to grade is within the Instructor Center.

Assignment 3: Prescribing Policies
Due Week 7 and worth 170 points

Write five to six (5-6) page paper in which you:

(Note: Refer to Review Question 8 located at the end of Chapter 5 for criteria 1-3.)

  1. Determine the following before deciding a prescription: (a) maximize effectiveness at the least cost; (b) maximize effectiveness at a fixed cost of $10,000; (c) achieve a fixed-effectiveness level of 6,000 units of service at a fixed cost of $20,000; (d) maximize net benefits, assuming that each unit of service has a market price of $10; (e) maximize the ration of benefits to costs, assuming that each unit of service has a market price of $10.
  2. Determine which of the two main programs (Program I and Program II) should be selected under each of these criteria. Justify your position.
  3. Describe the conditions under which each criterion may be an adequate measure of the achievement of objectives.

(Note: Refer to the Demonstration Exercise at the end of Chapter 5 for criteria 4-9.)

  1. Determine the assumptions that govern estimates of the value of time lost driving, indicating which assumptions (if any) are more tenable than others. Justify your position.
  2. Determine the best way to estimate the value of time. Justify your position.
  3. Determine the best way to estimate the cost of a gallon of gasoline. Justify your position.
  4. Determine the more reliable method to estimate driving speeds and miles per gallon by using (a) official statistics on highway traffic from the Environmental Protection Agency or by using (b) engineering studies of the efficiency of gasoline engines by the Department of Energy. Discuss any consequences of using one source rather than another. Justify your position.
  5. Estimate the value of a life saved. Justify your position.
  6. Determine which policy is preferable, (a) the 55-mph speed limit or (b) the 65-mph limit. Justify your position.
  7. Include at least two (2) peer-reviewed references (no more than five [5] years old) from material outside the textbook to support your views. Note: Appropriate peer-reviewed references include scholarly articles and governmental Websites. Do not use open source Websites such as Wikipedia, Sparknotes.com, Ask.com, and similar Websites are not acceptable resources.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

Unformatted Attachment Preview

8.Return to Figure 5.2 and consider the following criteria for prescription: a.Maximize effectiveness at least cost [Note: Be careful—this is a tricky question]. b.Maximize effectiveness at a fixed cost of $10,000. c.Minimize costs at a fixed-effectiveness level of 4,000 units of service. d.Achieve a fixed-effectiveness level of 6,000 units of service at a fixed cost of $20,000. e.Assuming that each unit of service has a market price of $10, maximize net benefits. f.Again assuming that each unit of service has a market price of $10, maximize the ratio of benefits to costs. Indicate which of the two main programs (program I and program II) should be selected under each of these criteria, and describe the conditions under which each criterion may be an adequate measure of the achievement of objectives. FIGURE 5.2 Cost-effectiveness comparisons using four criteria of adequacy. Source: Adapted from E. S. Quade, Analysis for Public Decisions (New York: American Elsevier, 1975), p. 93. To answer this question, we must look at the relation between costs and effectiveness, rather than view costs and effectiveness separately. Yet this is where the complications begin (see Figure 5.2): (1) If we are dealing with a type I (equal-cost) problem and costs are fixed at $20,000 (C2), program II is preferable because it achieves the higher level of effectiveness while remaining within the fixed-cost limitation. (2) If we are confronted with a type II (equal-effectiveness) problem and effectiveness is fixed at 6,000 units of service (E2), program I is preferable. (3) If, on the other hand, we are dealing with a type III (variable-cost-variable-effectiveness) problem, for which costs and effectiveness are free to vary, program II is preferable, because the ratio of effectiveness to costs (called an effectiveness-cost ratio) is greatest at the intersection of E1 and C1. Here program II produces 4,000 units of service for $10,000, that is, a ratio of 4,000 to 10,000 or 0.4. By contrast, program I has an effectiveness-cost ratio of 0.32 (8,000 units of service for $25,000 = 8,000/25,000 = 0.32).10 Finally, (4) if we are dealing with a type IV (equalcost-equal-effectiveness) problem, for which both effectiveness and costs are fixed at E2 and C2, neither program is adequate. This dilemma, which permits no adequate solution, is known as criterion over specification. The lesson of this illustration is that it is seldom possible to choose between two alternatives on the basis of either costs or effectiveness. Although it is sometimes possible to convert measures of effectiveness into dollar benefits, which permits us to calculate net income benefits by subtracting monetary costs from monetary benefits, it is frequently difficult to establish convincing dollar equivalents for important policy outcomes. What is the dollar equivalent of a life saved through traffic safety programs? What is the dollar value of international peace and securiy promoted by United Nations educational, scientific, and cultural activities? What is the dollar value of natural beauty preserved through environmental protection legislation? Such questions will be examined further when we discuss cost-benefit analysis; but it is important here to recognize that the measurement of effectiveness in dollar terms is a complex and difficult problem.11 Sometimes it is possible to identify an alternative that simultaneously satisfies all criteria of adequacy. For example, the broken-line curve in Figure 5.2 (Program III) adequately meets fixed-cost as well as fixed-effectiveness criteria and also has the highest ratio of effectiveness to costs. As this situation is rare, it is almost always necessary to specify the level of effectiveness and costs that is regarded as adequate. Questions of adequacy cannot be resolved by arbitrarily adopting a single criterion. For example, net income benefits (dollars of effectiveness minus dollar costs) are not an appropriate criterion when costs are fixed and a single program with the highest benefit-cost ratio can be repeated many times. This is illustrated in Table 5.4, in which program I can be repeated 10 times up to a fixed-cost limit of $40,000, with total net benefits of $360,000 (i.e., $36,000 × 10). Program I therefore has the highest benefit-cost ratio. But if program I cannot be repeated—that is, if only one of the three programs must be selected—program III is preferable because it yields the greater net benefits, even though it has the lowest benefit-cost ratio. Equity. The criterion of equity is closely related to legal and social rationality and refers to the distribution of effects and effort among different groups in society. An equitable policy is one for which effects (e.g., units of service or monetary benefits) or efforts (e.g., monetary costs) are fairly or justly distributed. Policies designed to redistribute income, educational opportunity, or public services are sometimes prescribed on the basis of the criterion of equity. A given program might be effective, efficient, and adequate—for example, the benefit-cost ratio and net benefits may be superior to those of all other programs—yet it might still be rejected on grounds that it will produce an inequitable distribution of costs and benefits. This could happen under several conditions: Those most in need do not receive services in proportion to their numbers, those who are least able to pay bear a disproportionate share of costs, or those who receive most of the benefits do not pay the costs. The criterion of equity is closely related to competing conceptions of justice or fairness and to ethical conflicts surrounding the appropriate basis for distributing resources in society. Such problems of “distributive justice,” which have been widely discussed since the time of the ancient Greeks, may occur each time a policy analyst prescribes a course of action that affects two or more persons in society. Although we may seek a way to measure social welfare, that is, the aggregate satisfaction experienced by members of a community. Yet individuals and groups within any community are motivated by different values, norms, and institutional rules. What satisfies one person or group often fails to satisfy another. Under these circumstances, the analyst must consider a fundamental question: How can a policy maximize the welfare of society, and not just the welfare of particular individuals or groups? The answer to this question may be pursued in several different ways: 1.Maximize individual welfare. The analyst can attempt to maximize the welfare of all individuals simultaneously. This requires that a single transitive preference ranking be constructed on the basis of all individual values. Arrow’s impossibility theorem, as we have seen, demonstrates that this is impossible even when there are only two persons and three alternatives. 2.Protect minimum welfare. The analyst can attempt to increase the welfare of some persons while still protecting the positions of persons who are worse off. This approach is based on the Pareto criterion, which states that one social state is better than another if at least one person is better off, and no one is worse off. A Pareto optimum is a social state in which it is not possible to make any person better off without also making another person worse off. 3.Maximize net welfare. The analyst can attempt to increase net welfare (e.g., total benefits less total costs) but assumes that the resulting gains could be used to compensate losers. This approach is based on the Kaldor-Hicks criterion: One social state is better than another if there is a net gain in efficiency (total benefits minus total costs) and if those who gain can compensate losers. For all practical purposes, this criterion, which does not require that losers actually be compensated, avoids the issue of equity. 4.Maximize redistributive welfare. The analyst can attempt to maximize redistributional benefits to selected groups in society, for example, the racially oppressed, poor, or sick. One redistributive criterion has been put forth by philosopher John Rawls: One social state is better than another if it results in a gain in welfare for members of society who are worst off.12 DEMONSTRATION EXERCISE Return to Chapter 1 and reread Case 1.1 (Saving Lives and Saving Time). Then read Case 5.1 (Opportunity Costs of Saving Lives—The 55 mph Speed Limit) below. Prepare a short analysis in which you answer these questions: ■What assumptions govern estimates of the value of time lost driving? Are some assumptions more tenable than others? Why? ■What is the best way to estimate the value of time? Justify your answer. ■What is the best way to estimate the cost of a gallon of gasoline? Justify your answer. ■Driving speeds and miles per gallon estimates may be based on official statistics on highway traffic from the Environmental Protection Agency and the Department of Energy or on engineering studies of the efficiency of gasoline engines. Which is the more reliable? Why? What are the consequences of using one source rather than another? ■What is the value of a life saved? Explain. ■Which policy is preferable, the 55 mph speed limit or the 65 mph limit that was abandoned in 1994? CASE 1.1 THE GOELLER SCORECARD—MONITORING AND FORECASTING TECHNOLOGICAL IMPACTS CASE 1.1 THE GOELLER SCORECARD—MONITORING AND FORECASTING TECHNOLOGICAL IMPACTS When advanced technologies are used to achieve policy goals, sociotechnical systems of considerable complexity is created. Although it is analytically tempting to prepare a comprehensive economic analysis of the costs and benefits of such policies, most practicing analysts do not have the time or the resources to do so. Given the time constraints of policy making, many analyses are completed in a period of several days to a month, and in most cases policy analyses do not involve the collection and analysis of new data. Early on in a project, policy makers and their staffs typically want an overview of the problem situation and the potential impacts of alternative policies. Under these circumstances, the scorecard is appropriate. The Goeller scorecard, named after Bruce Goeller of the RAN D Corporation, is appropriate for this purpose. Table C1.1 shows the impacts of alternative transportation systems. Some of the impacts involve transportation services used by members of the community, whereas others involve impacts on low-income groups. In this case, as Quade observes, the large number of diverse impacts are difficult to value in dollar terms, making a benefit-cost analysis impractical and even impossible.50 Other impacts involve financial and economic questions such as investments, jobs created, sales, and tax revenues. Other impacts are distributional because they involve the differential effects of transportation. ■ TABLE C1.1 Scorecard Social Impacts CTOL VTOL TACV Passengers (million miles) 7 4 9 Per trip time (hours) 2 1.5 2.5 Per trip cost ($) $17 $28 $20 Reduced congestion (%) 0% 5% 10% TRANSPORTATION FINANCIAL Investment ($ millions) $150 $200 $200 Annual subsidy ($ millions) 0 0 90 Added jobs (thousands) 20 25 100 Added sales ($millions) 50 88 500 Noise (households) 10 1 20 Added air pollution (%) 3% 9% 1% Petroleum savings (%) 0% −20% 30% Displaced households 0 20 500 Taxes lost ($millions) 0 0.2 2 Landmarks destroyed None None Fort X 7% 1% 20% 2% 16% 40% ECONOMIC COMMUNITY DISTRIBUTIONAL Low-income trips (%) Low-income household Noise annoyance (%) Source: Goeller (1974); Quade, Analysis for Public Decisions (1975), p. 60. Note: Conventional takeoff and landing aircraft (CTOL); vertical takeoff and landing aircraft (VTOL); tracked air-cushion vehicle (TACV). CASE 5.1 OPPORTUNITY COSTS OF SAVING LIVES-THE 55 MPH SPEED LIMIT41 Conducting a benefit-cost analysis is not only a technical matter of economic analysis. It is also a matter of identifying, and if necessary challenging, the assumptions on which benefit-cost analysis is based. This can be seen if we examine the case of the National Maximum Speed Limit of 1974. Table 5.11 describes steps in conducting a benefit-cost analysis and a critique of the assumptions underlying the analysis. The case shows, among other things, that all steps in conducting a benefit-cost are sensitive to these assumptions. ■ TABLE 5.11 Measuring the Costs and Benefits of the 55 mph Speed Limit: A Critical Appraisal Steps Critique Costs 1. The major cost of the National Maximum Speed Law (NMSL) was the additional time spent driving as a result of slower speeds. To calculate the number of hours spent driving in 1973, divide the total number of vehicle miles traveled on interstate highways by the average highway speed (65 mph) and then multiply by the average occupancy rate per vehicle, which is approximately 1.77 persons. Why use 1973 mileage without any adjustment? The average growth rate in travel before 1973 was 4 percent. Therefore, the formula should be Next, find the number of hours spent driving in 1974 by dividing total vehicle miles traveled on interstate highways by the average highway speed in 1974 (58 mph). The NMSL caused some people to cancel trips and others to find alternative modes of transportation; as a result, time calculations based on 1974 mileage would be an underestimate. Therefore, we should use the 1973 mileage of 525 million miles. Using the following formula, where VM is vehicle miles, S is average speed, R is average occupancy rate, and H is the number of hours lost, The number of hours lost driving in 1974, based on this equation, is estimated to be 1.72 billion. 2. To estimate the value of this time, begin with the average wage rate for all members of the labor force in 1974—$5.05. The value of one hour’s travel is not $5.05 per hour because very few persons would pay this sum to avoid an hour of travel. We estimate that the people will pay up to 33 percent of their average hourly wage rate to avoid an hour of commuting. The value of time spent traveling is therefore about $1.68 per hour. Using the above formula, the estimated number of hours lost should be 1.95 billion—not 1.72 billion. Why take a percentage of the $5.05 figure based on what commuters would pay to avoid an hour of travel? We should avoid reducing the value of people’s time for two reasons. First, the value of time in cost to society is equal to what society will pay for productive use of that time. Time’s value is not what a commuter will pay to avoid commuting because commuting has other benefits, such as solitude for thinking or the advantages of suburban living. Second, the value of time spent driving for a trucker is many times the industrial wage rate. Discounting would greatly underestimate the value of commercial drivers. 3. Application of the cost figure ($1.68) to the time lost figure (1.72 billion hours) results in an estimated travel cost of $2.89 billion. Applying the value of one hour’s time to the hours lost as calculated above (1.95 billion) results in an estimated travel cost of $9.85 billion. 4. The NMSL also has some enforcement costs. Total enforcement cost should be about Total enforcement costs for signs, advertising, and $12 million-not $810,000. patrolling are about $810,000. a. New signs were posted. Cost estimates from 25 states for modification of speed limit signs totaled $707,000; for 50 states, this results in an OK. estimated $1.23 million. Spread out over the three-year life of traffic signs, we get an estimate of $410,000. b. The federal government engaged in an advertising campaign encouraging compliance. The Federal Highway Administration’s advertising budget for 1974 was $2 million. About 10 percent of this, or $200,000, was spent to encourage compliance with the NMSL. Assume that an additional amount of public service advertising time was donated, for a total of $400,000. Not OK. The Federal Highway Administration does other advertising. Public service advertising estimate also seems low. Compliance costs pose some problems, but they can be estimated. In 1973, some 5,711,617 traffic citations jumped by 1,713,636 to over 7.4 million. Each c. Compliance costs are difficult to estimate. The cost of highway patrols cannot be used because additional traffic citation includes an these persons were patrolling highways before opportunity cost to society. If a law enforcement officer were not issuing the NMSL. Assume that states did not hire additional personnel solely for enforcement of traffic tickets, he or she could be the NMSL. Therefore, we assume that solving other crimes. Assuming that it enforcement of the NMSL will not entail any requires 15 minutes for a law enforcement additional costs above enforcement of previous officer to issue a speeding ticket, the speed limits. total cost of law enforcement is $2.9 million. This figure is based on the average cost of placing a law enforcement officer on the streets at $6.75 per hour. This figure is clearly an underestimate because it does not count time lost waiting to catch speeders. Approximately 10 percent of all speeders will demand a court hearing. Estimating an average of 30 minutes for each hearing and an hourly court cost of $45 results in an additional cost to society of $3.8 million for 171,000 cases. Given the overloaded court dockets, this opportunity cost may be even higher. Benefits Why estimate gasoline saved by comparing 1973 and 1974 miles-per-gallon figures in relation to vehicle miles traveled? The 1. The most apparent benefit of the NMSL is the federal figures for average miles per amount of gasoline saved. The average gasoline hour are estimates based on several economy improves from 14.9 miles per gallon at assumptions. Given the conflict between 65 miles per hour to 16.1 at 58 miles per hour. industry estimates, Environmental Use this information to estimate the number of Protection Agency estimates, and Energy gallons of gasoline saved by traveling at lower Department estimates, any miles-per-hour speeds. Gallons saved will be calculated by the estimate must be considered unreliable. following formula, where VMT is vehicle miles traveled on interstate highways (not all highways) The number of vehicle miles traveled is and MPG is miles per gallon. also based on gallons of fuel sold multiplied by average miles per hour. Hence, this figure is also subject to error. Studies of the efficiency of gasoline engines show that the effect of reducing the average speed of free-flow interstate highways would be to save 2.57 percent of the normal gas used. In 1979, American motorists consumed 106.3 billion gallons of gasoline. Saving 2.57 percent would total 2.73 billion gallons. In 1974, the average price of gasoline was 52.8 cents per gallon. This market price, however, does not reflect the social cost of gasoline, due to government price controls on domestic oil. The marginal (or replacement) cost of crude oil is the price of foreign oil. Therefore, the price of gasoline must reflect the higher cost of foreign oil. Use the market price of gasoline in the absence of Why use the market price? There is no way to determine whether a marginal gallon of gasoline will be imported or come from domestic reserves. In addition, the costs and benefits of the NMSL should not be distorted simply because the U.S. government does not have a market- price controls, which is about 71.8 cents per gallon. This figure yields an estimate of $2.50 billion in benefits through gasoline saved. 2. A major second-order benefit of the 55 mph limit was a large drop in traffic fatalities, from 55,087 in 1973 to 46,049 in 1974. Part of the gain must be attributable to reduction in traffic speeds. Studies by the National Safety Council estimate that up to 59 percent of the decline in fatalities was the result of the speed limit. Applying this proportion to the decline in fatalities provides an estimated 5,332 lives saved. The consensus of several studies is that a traffic fatality costs $240,000 in 1974 dollars. Using this figure, the value of lives saved in 1974 is estimated at $1,279.7 million. oriented energy policy. In 1974, gasoline cost 52.8 cents per gallon, and therefore, a gallon of gasoline saved was worth 52.8 cents. OK. 3. The NMSL also resulted in a reduction of nonfatal injuries. Use the 59 percent figure found in the fatality studies. Between 1973 and 1974, nonfatal traffic injuries declined by 182,626. Applying the estimated percentages results in 107,749 injuries avoided. Generally, three levels of injuries are indentified: (1) permanent total disability, (2) permanent partial disability and permanent disfigurement, and (3) nonpermanent injury. In 1971, the proportion of traffic injuries that OK. accounted for injuries in each category was 0.2 percent, 6.5 percent, and 93.3 percent, respectively. The National Highway Traffic Safety Administration estimated that in 1971, the average cost of each type of injury was $260,300, $67,100, and $2,465, respectively. The average injury, therefore, cost $8,745 in 1974 dollars. Applying this figure to our injury estimate results in $942.3 million as the social benefit of injury reduction. 4. The final benefit of the reduction in property damage fell from 25.8 million to 23.1 million. About 50 percent of this reduction was the result of lower speeds. The NMSL saved 1.3 million cases of property damage at an average cost of $363. Therefore, the total benefit from property damage prevented is $472 million. OK. Conclusion The first estimate of the costs and benefits of the NMSL results in the following figures (in millions): Using different assumptions, the second estimate of the costs and benefits of the NMSL is as follows (in millions): Costs Costs Time spent traveling $2,890.0 Time spent traveling $9,848.0 Enforcement .8 Enforcement 12.0 $9,860.0 $2,890.8 Benefits Benefits Gasoline saved $2,500.0 Gasoline save $1,442.0 Lives saved 1.297.7 Lives saved 998.0 Injuries prevented 942.3 Injuries prevented 722.0 Property damage averted 472.0 Property damage adverted 236.0 $3,398.0 $5,212.0 Net benefits: $2,321.2 million Net benefits: −$6,462 million Benefits to costs ratio: 1.8 Benefits to costs ratio: .345 Source: The steps and data were suggested by Charles T. Clotfelter and John C. Hahn, “Assessing the National 55 m.p.h. Speed Limit,” Policy Sciences 9 (1978): 281–94.The critical comments are based on Charles A. Lave, “The Costs of Going 55,” Car and Driver. May 1978, p. 12.
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Please let me know if there is anything needs to be changed or added. I will be also appreciated that you can let me know if there is any problem or you have not received the work Good luck in your study and if you need any further help in your assignments, please let me know Can you please confirm if you have received the work? Once again, thanks for allowing me to help you R MESSAGE TO STUDYPOOL NO OUTLINE IS NEEDED

Running Head: WEEK 7 DISCUSSION 1

1

Public Policy - Week 7 Discussion 1
Name:
Institutional Affiliation:
Date:

2

WEEK 7 DISCUSSION 1
Week 7 Discussion 1
"Monitoring Observed Policy Outcomes"
Relationship between ill-structured problems and approaches to monitoring
Ill-structured problems have been found to be complex and not concisely defined. This

present s a challenge to the person or party solving the presented problems since wide knowledge
base may be required and may not be available readily. Considering the ill-structured approaches
to monitoring, these approaches may not be subjected directly towards the desired aspect since
they are not well-structured. The relationship between the two is that they both do not have welldefined strategies with which one may look the problem or may perceive the approaches. A good
example of an ill-structured problem is designing a car. The initial state is clear while the
constraints, actions and end states may not be defined. Ensuring that the respective experts on a
given area have been gathered and all the possible knowledge on how the respective aspects
work may present a solution that could be used in ill-structured problems and approaches (Chin
& Chia, 2006).
Threats to validity and rebuttal
The Greater cost of an alternative may be found to follow the rules of demand which
claim that demand for a commodity is negatively related to the price of a given product.
Following the history of the given product which is a threat to validity, it can be deduced that the
initial theory may be an assumption that may not always hold. This can be backed up by the
example of Giffen goods. It has been established that in case of Giffen goods, the demand for
some products may go up in the market while the prices of the associated products also go up.

WEEK 7 DISCUSSION 1

3

Also, another example of the negation of the initial theory is the expensive jewelry and clothing.
Their value in terms of money and demand increase in the same manner.
The enforcement of the maximum speed limit of 55 mph has been found to be
problematic to the offenders who may be caught and be subjected to various fines and damages
that may lead to injuries or even damages to their vehicles. While the issues that may be because
of exceeding the standard speed, limit may be found to be costly in the long run, it has be...


Anonymous
Great content here. Definitely a returning customer.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Content

Related Tags