National and local pressures to improve student achievement, to implement educational reforms, to increase services to “at risk” students, and to monitor the size of education budgets all function as motivators for educators to consider the use of cost analysis in decisions about resource allocation. Yet the application of cost-benefit and cost-effectiveness analyses in education is limited. The authors explore the advances in cost-benefit and cost-effectiveness analyses that have been made in the human services, health, and medical fields, and they identify the difficulties and analyze the issues involved in applying these analyses in education. They make recommendations for assessing costs and measuring effectiveness in educational evaluations, discuss the strengths and weaknesses of several exemplar cost-benefit and cost-effectiveness educational studies, and provide a protocol to guide future analyses.

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