Measuring the Economic Value of Government Programs: An Application to Early-Childhood Interventions

Ozdemir, Semra

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March 20, 2019

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Ozdemir, Semra
- Affiliation: College of Arts and Sciences, Department of Public Policy

Abstract

Compelling evidence has been found that investing in early-childhood development for disadvantaged children has long-term economic benefits to program participants and non-participants alike. Public provision of early-childhood intervention programs requires allocation of taxpayers' money to these programs. At a time when the opportunity cost of public dollars is very high, it is important to estimate taxpayers' preferences for allocating public funds to early-childhood development programs now for benefits that would be accrued years later. The objectives of this dissertation were 1) To quantify public's willingness to pay for reducing childhood poverty in the US; 2) To present a budget-allocation framework to measure public demand for specific government programs by allowing respondents to express preferences for smaller government; and 3) To discuss the presence and implications of asymmetry in stated preferences for multiple non-market goods. To achieve these objectives, this study utilized stated-preference (SP) survey methods using a contingent valuation survey and two discrete-choice experiment surveys. The web-enabled surveys were administered to a representative sample of US general population. Four findings stand out across the chapters: 1) The population-weighted mean WTP for an intensive high-quality early-childhood program was $33 to $52 per year per household and was much lower than the annual per household program cost; 2) Preferences for supporting early-childhood development programs were correlated with ideological perspective, and government involvement seemed to be the main reason for the lack of conservatives' support on the program; 3) The budget-allocation framework was used successfully to calculate welfare changes based on changes in disposable income and/or reallocation of funding from one government program to another while mitigating possible protest responses; and 4) Large asymmetry in preferences was observed for taxes and government programs.

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