Child care outcomes: economic perspectives and issues

Economics starts with the observation of widespread scarcity and the consequent need for choices about resource allocation. Common criteria for such choices are economy, effectiveness, efficiency and equity. This paper defines these criteria and locates them within a conceptual framework (the 'production of welfare'). It also examines some of the reasons for the growth in interest in them. The main modes of evaluation - cost-benefit, cost-effectiveness, cost-utility and cost-consequences analyses - are described and illustrated. Few such evaluations have been conducted in child care, and the paper ends with speculation as to why this is so.