BBBSA Evaluation 1

Cost-Benefit Evaluation for the Big Brother/Big Sister Program

Nia Harrison, Nikola Juris, Dori Stern, and Steven Stern

The Big Brother/Big Sister program matches children with mentors one-to-one across the country. It consists of two essential programs: community-based mentoring and school-based mentoring (Big Brothers/ Big Sisters, 2007). Using an evaluation by Tierney, Grossman, and Resch (1995), we evaluated the costs and benefits in order to measure the net long-term benefit of the program. These are discussed below and shown in Table 1. We performed a number of sensitivity analyses, shown in Table 2, to measure the robustness of our results.[1]

Tierney, Grossman, and Resch (1995) found that the program decreases the probability that youth use drugs by 45.8% and the probability that they use alcohol by 27.4%. Furthermore, they found that it decreases the probability of youth hitting someone by 31.7%. Lynskey et al. (2003) reported that doing drugs reduces the probability of completing high school by 6.8%. We assumed that an average male (female) high school graduate earns $15.00 ($13.50) per hour. Assuming one works 2000 hours per year, we have base annual earnings of $30,000 ($27,000) for males (females). Tierney, Grossman, and Resch (1995) estimated that the cost of the program is $1,000 per match. Adjusting estimates from French et al. (2002) to fit a one-year time period, we calculated that the annual benefit of not using drugs is $5,103. The extra annual benefit of not using alcohol was assumed to be one-third the annual benefit of not using drugs. It was assumed that there was no annual benefit of not hitting someone. The benefit of graduating from high school was calculated bymultiplying the additional annual earnings received as a result of graduating high school $30,000 times 46% (Card, 1999) by the effect of drugs on the probability of graduating high school, resulting in $938 ($845) for boys (girls).

Table 1
Boys / Girls
Effect on probability of using drugs / .458 / .458
Effect on probability of using alcohol / .274 / .274
Effect on probability of hitting someone / .317 / .317
Effect of drugs on probability of graduating high school / .068 / .068
Average high school wage per hour / $15 / $13.50
Annual earnings / $30,000 / $27,000
Cost of the program / $1,000 / $1,000
Annual benefit of not using drugs / $5,103 / $5,103
Extra annual benefit of not using alcohol / $1,701 / $1,701
Annual benefit of not hitting someone / 0 / 0
Benefit of graduating from high school / $938 / $845
Discount factor / 0.9 / 0.9
Long-term benefit of not using drugs / $23,374 / $23,374
Long-term benefit of not using alcohol / $4,661 / $4,661
Long-term benefit of not hitting someone / 0 / 0
Long-term benefit of graduating from high school / $9,384 / $8,446
Net benefit / $36,419 / $35,480

In order to translate these calculations into long-term benefits, we assumed that the annual discount factor was 0.9. The long-term benefit of not using drugs was calculated by multiplying the program’s effect on the probability of using drugs by the annual benefit of not using drugs, and adding up the discounted benefits over the remainder of the individual’s life. A similar calculation was performed for not using alcohol, not hitting others, and graduating from high school.The long-term benefit associated with finishing high school is $9,384 ($8,446) for boys (girls). Adding up all of the long-term benefits and subtracting the cost of the program results in the net benefit of the program: $36,419 ($35,480) for boys (girls).

Table 2 / Assumption / Net Benefit
Average high school wage per hour / Boys / $15 / $36.419
$30 / $45,803
Girls / $13.50 / $35,480
$27 / $43,926
Annual benefit of not hitting someone / Boys / 0 / $36.419
$897 / $39,263
Girls / 0 / $35,480
$880 / $38,271
Discount factor / Boys / 0.9 / $36,419
0.8 / $17,709
Girls / 0.9 / $35,480
0.8 / $17,240
Depreciating benefits / Boys / Base (1/1-β) / $36,419
1.220 / $3,564
Girls / Base (1/1- β) / $35,480
1.220 / $3,550
Cost of the program / Boys / $1,000 / $36,419
$5,217 / $32,202
Girls / $1,000 / $35,480
$5,217 / $31,263

In Table 2, various assumptions that had been made in the base case were changed, one at a time while holding the others constant, in order to measure the sensitivity of the base case analysis. Doubling the average high school wage per hour yields a new net benefit of $45,803 ($43,926) for boys (girls). For the benefit associated with not hitting people we assumed that the annual benefit of not hitting someone is 2% percent of the combined annual benefit of no jail time and the annual benefit of no crime as estimated in our evaluation of the Service Learning program. Assuming that this amount[2] is the annual benefit of not hitting someone results in a new net benefit of $39,263 ($38,271) for boys (girls).Decreasing the discount factor from 0.9 to 0.8 yields a net benefit of $17,709 ($17,240) for boys (girls).

There was some concern that the benefits of the program would dissipate over time. To measure the impact of this concern, we considered the possibility that benefits would depreciate by 80% per year during teen years. The average age of participation in the Big Brother/Big Sister program is 12 (Big Brothers/ Big Sisters, 2007), implying 6 years of depreciation. This leads to a multiplier of 1.220, as seen in Table 2, while the base case multiplier was 10. This reduction in the multiplier causes net benefits to decrease to $3,564 ($3,550) for boys (girls).

One way to deal with the concern of benefit dissipation is to consider the possibility that the participant would continue with the program every year until he/she is 18 years old, thus not allowing for the depreciation of benefits. This leads to an extra cost of program participation, resulting in a new cost of $5,217 for both boys and girls, and a new net benefit of the program of $32,202 ($31,263) for boys (girls). An examination of the net benefits of the program in all the sensitivity analyses indicates that the Big Brother Big Sister program can lead to large benefits. The source of large gains are the long-term benefits of reduced substance abuse and the increased probability of finishing high school.

References

Big Brothers/Big Sisters (2007). “Volunteering with Big Brothers Big Sisters”

Card, D. (1999). “The Causal Effect of Education on Earnings.” In O. Ashenfelter and D. Card (Eds.). Handbook of Labor Economics, 3, pp. 1801-1863. Amsterdam: North-Holland.

French, M., H. Salome, J. Sindelar, and A. McLellan (2002). “Benefit-Cost Analysis of Addiction Treatment: Methodological Guidelines and Empirical Application Using the DATCAP and ASI.” Health Services Research.

Harrison, Nia, Nikola Juris, Dori Stern, and Steven Stern (2008). “Methodology for Youth Development Cost-Benefit Analyses.”

Lynskey, M., C. Coffey, L. Degenhardt, J. Carlin, and G. Patton (2003). “A Longitudinal Study of the Effects of Adolescent Cannabis Use on High School Completion.” Addiction. 98(5): 685-692.

Tierney, J.P., J. Grossman, andN. Resch(1995).Making a Difference: An Impact Study of Big Brothers Big Sisters. Philadelphia: Public/Private Ventures.

[1] Details of Methodology are available at Harrison, Juris, Stern, and Stern (2008)

[2]$897 ($880) for boys (girls)