Ten-Year Impacts of Burkina Faso’s BRIGHT Program

V. COST-EFFECTIVENESS AND COST-BENEFIT ANALYSIS MATHEMATICA POLICY RESEARCH
40-year period; we assess the benefits of exposure during this same period on the benefits
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2. To simplify the calculations, we assume that the fixed costs for all schools, BRIGHT and
traditional government, are incurred at the start of the schools’ life span in 2006. Although
this is true for all BRIGHT schools, it is not true for traditional government schools.
Table V.6. List of assumptions for benefit-cost ratio and ERR calculation
Variable
Basis
Assumed
value
Life span of school
BRIGHT school Program design from MCC 40
Traditional government schools Assumed due to lower quality relative to the BRIGHT
schools 30
Age of participation in school 2015 follow-up household survey 6–12
Age of participation in labor force Burkina Faso Household Survey, 2010 a 15–65
Average grade level in unselected
villages
Grades gained per year of exposure
Estimates from 2015 follow-up household and school
surveys 1.56
Estimates from 2015 follow-up household and school
surveys 0.10
Average cohort size Estimation from 2015 evaluation survey census b 17
Benefits derive only from higher wages
Research does not exist to allow monetization of other
benefits
Annual earnings of working population Estimates from Burkina Faso Household Survey, 2010 c $643
Return to extra grade level Estimates from Burkina Faso Household Surveys, 1994,
1998, 2003, and 2010 d
High estimate 16%
Low estimate 7%
Discount rate MCC practice for net present value calculation e 10%
Notes:
a
We examined the distribution of the working population by age using data from the 2010 National Household Survey
to determine that the typical working age in Burkina Faso is between 15 and 70. However, the life expectancy of a 6-
year-old is 65 (United Nations 2013).
b
To estimate the cohort size, we take the average of all the age cohorts from 6 years to 22 years in the census
carried out as part of the 2015 follow-up household survey.
c
Calculated as the average annual earnings of the working-age population ages 15–65 from the 2014 Burkina Faso
National Household Survey. Note that unemployed individuals are included and considered to have no earnings.
d
Estimated using data from the 1994, 1998, 2003, 2010, and 2014 Burkina Faso Household Surveys. This analysis is
presented in Appendix Table D.10.
e
See MCC 2013.
N/A
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We assume 40 years because this is the estimated life span specified by the program. However, it is possible that
this goal might not be achieved. For example, it is possible that the Burkinabe government might choose to use the
schools past their recommended lifetime or that the schools might not be maintained sufficiently, resulting in a
shorter-than-expected life span. However, the assumed life span does not significantly affect the final cost-benefit
estimates. We conducted two additional estimates assuming that the BRIGHT schools lasted 30 or 50 years and
government schools lasted 10 years less than the BRIGHT schools. The resulting ERR estimates are almost identical
to those presented in Table V.8. The net benefits and benefits-cost ratios are also similar, with the shorter life spans
generating larger benefits because the 10-year period in which the government school is closed is less heavily
discounted. For example, the net benefits of the high returns to schooling, high government school cost scenario is -
$34,413 per village with a 30-year BRIGHT life span and -$87,342 with a 50-year life span.
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