pdf [5.3MB] - Department of Families, Housing, Community Services

Alternatives to such a partnership are limited (eg, waiting an additional 15 years until furtherLSAC data are available or using international sources if they exist, which would be lessdesirable).Methodology review and discussionThere are two main approaches to measuring the value of PFF, which is equivalent toestimating the cost of NFF.The incidence approach measures the number of new cases of NFF in a base period(say, 2009) and attributes costs due to that NFF, both financial and non-financial, overthe affected persons’ lifetimes. The total cost of NFF represents the net present value(NPV) of current and future costs incurred due to all new cases in that year.The prevalence approach measures the total number of people ever affected by NFF ina base period and costs associated with those cases, both financial and non-financialcosts, in that year.These methodologies present information in slightly different ways and have differentapplications. The prevalence approach is a ‘snapshot’ as it reports impacts in one year and,in general, prevalence estimates can be easier to understand by policy makers as they relateto a single point in time. Also, the financial value of impacts can be compared to measuressuch as gross domestic product (GDP). The incidence approach reports the lifetime impactsassociated with a condition; as policy interventions are focused at preventing NFF, thismethodology is most relevant for its application in CBA or CEA studies.Aetiology, data sources and the study design used to track outcomes are key decidingfactors determining which approach is best. In this instance an incidence approach isconsidered most appropriate, due to these factors and the lag times between exposure to thefamily environment and associated outcomes.The valuation exercise would incorporate a number of cost components related to the threebroad areas of outcomes (health, productivity and social/criminality) previously discussed. Anumber of these cost components will be attributable to more than one of the impactsdiscussed above (for example, health system expenditure can be attributable to both healthspecific outcomes and criminal behaviour). These components are: health system expenditure; productivity and carer costs/gains; criminality costs; taxation revenue forgone and associated deadweight losses (DWLs); other financial impacts; and burden of disease (measured in disability adjusted life years or DALYs).Cost components map to FF as shown in the diagram below.vi