(a) ACE uses a methodology that yields quite different results than a raw cost-effectiveness analysis; (b) this methodology seems to have major flaws, as it can lead to clearly incoherent conclusions and recommendations easily; and (c) thus, it is better to use a more straightforward, direct CEA.
I agree with points A and B, but I am much less convinced about point C.
I would like to point to Problem 1 and Problem 4 from the review:
Charities can receive a worse Cost-Effectiveness Score by spending less money to achieve the exact same results.
Charities can have 1,000,000 times the impact at the exact same price, and their Cost-Effectiveness Score can remain the same.
Effective giving is all about achieving the greatest impact at the lowest cost. ACE’s methodology is not properly accounting for impact, or for cost.
Using the equation impact / cost at least results in impact being in the numerator, and cost being in the denominator. To me, this alone makes a straightforward, direct CEA a better methodology than the one used by ACE.
To me, this feels a bit like an isolated demand for methodological rigor. Every methodology has flaws, and it’s easy to find situations that lead to clearly incoherent conclusions.
I absolutely agree that every methodology has flaws, and we did not mean to imply otherwise. However, the incoherent conclusions described in our review of ACE’s methodology are not one off instances. hey are pervasive problems that impact all of ACE’s reviews.
Hi Joey,
Thank you for taking the time to read our review!
I would like to point to Problem 1 and Problem 4 from the review:
Charities can receive a worse Cost-Effectiveness Score by spending less money to achieve the exact same results.
Charities can have 1,000,000 times the impact at the exact same price, and their Cost-Effectiveness Score can remain the same.
Effective giving is all about achieving the greatest impact at the lowest cost. ACE’s methodology is not properly accounting for impact, or for cost.
Using the equation impact / cost at least results in impact being in the numerator, and cost being in the denominator. To me, this alone makes a straightforward, direct CEA a better methodology than the one used by ACE.
I absolutely agree that every methodology has flaws, and we did not mean to imply otherwise. However, the incoherent conclusions described in our review of ACE’s methodology are not one off instances. hey are pervasive problems that impact all of ACE’s reviews.
Thank you for your feedback!