Yeah, it’s a very theoretical example. There are things that could be modeled as very very low cost, like choosing A instead of B where both A and B cost $10, but indeed let’s focus on the other example.
I think we care about the expected marginal cost-effectiveness (i.e. mean(“marginal effect”/”marginal cost”)). Both mean(“total effect”)/mean(“total cost”) and mean(“total effect”/”total cost”) are good approximations if our budget is small, but they might not be if the budget has to be large for some reason.
Yeah, it’s a very theoretical example.
There are things that could be modeled as very very low cost, like choosing A instead of B where both A and B cost $10, but indeed let’s focus on the other example.
Using “effect”/”cost” helps in many cases, but definitely not in all.
E.g. for policy intervention estimates of costs can vary by orders of magnitude: see https://forum.effectivealtruism.org/posts/h2N9qEbvQ6RHABcae/a-critical-review-of-open-philanthropy-s-bet-on-criminal?commentId=NajaYiQD7KhAJyBcp
I think we care about the expected marginal cost-effectiveness (i.e. mean(“marginal effect”/”marginal cost”)). Both mean(“total effect”)/mean(“total cost”) and mean(“total effect”/”total cost”) are good approximations if our budget is small, but they might not be if the budget has to be large for some reason.