With a bunch of unrealistic assumptions (like constant cost-effectiveness), the counterfactual impact should be (impact/resource - opportunitycost/resource) * resource.
If impact/resource is much bigger than opportunitycost/resource (so that the latter is negligible) this is roughly equal to impact/resource * resource, which is one reading of cost-effectiveness * scale.
If so, assuming that resource=$ in this case, this roughly translates to the heuristic “if the opportunity cost of money isn’t that high (compared to your project), you should optimise for total impact without thinking much about the monetary costs”.
We could also read “impact/resource - opportunitycost/resource” as a cost-effectiveness estimate that takes opportunity costs into account. I think Charity Entrepreneurship has been optimizing for this (at least sometimes, based on the work I’ve seen in the animal space) and they refer to it as a cost-effectiveness estimate, but I think this is not typical in EA.
If impact/resource is much bigger than opportunitycost/resource (so that the latter is negligible) this is roughly equal to impact/resource * resource, which is one reading of cost-effectiveness * scale.
Also, this is looking more like cost-benefit analysis than cost-effectiveness analysis.
So just total impact?
Yes, basically—if you’re starting a new project, then all else equal, go for the one with highest potential total impact.
Instead, people often focus on setting up the most cost-effective project, which is a pretty different thing.
This isn’t a complete model by any means, though :) Agree with what Lukas is saying below.
With a bunch of unrealistic assumptions (like constant cost-effectiveness), the counterfactual impact should be (impact/resource - opportunitycost/resource) * resource.
If impact/resource is much bigger than opportunitycost/resource (so that the latter is negligible) this is roughly equal to impact/resource * resource, which is one reading of cost-effectiveness * scale.
If so, assuming that resource=$ in this case, this roughly translates to the heuristic “if the opportunity cost of money isn’t that high (compared to your project), you should optimise for total impact without thinking much about the monetary costs”.
Good point.
We could also read “impact/resource - opportunitycost/resource” as a cost-effectiveness estimate that takes opportunity costs into account. I think Charity Entrepreneurship has been optimizing for this (at least sometimes, based on the work I’ve seen in the animal space) and they refer to it as a cost-effectiveness estimate, but I think this is not typical in EA.
Also, this is looking more like cost-benefit analysis than cost-effectiveness analysis.