What is Cost-Effectiveness Study

Online education offers strong intrinsic potential for advancing and augmenting teaching and learning through broadening and deepening access. Proponents of online education further claim extrinsic potential – that it should be less costly and just as effective as traditional education, if not more so. They consider the instruction equally or more effective relative to such factors as the depth of course content presented, student outcomes and breadth of access (Duderstadt, 2000; Allen & Seaman, 2003; Gomory, 2001).1 Are these claims accurate? How would we gauge their accuracy? What data would we collect? How would we make sense of that data? As in medicine and other social domains, there is a long-standing tradition in research on education of measuring the comparative costs and benefits of different interventions or modes of operation. Prominent examples of such interventions as assessed in this manner have included curricular reform, personnel restructuring, special programs, infrastructure improvements and class size innovations. The goal of these measurements is to identify the best course of action by gauging the relative ratio of cost to benefit. Policy may then be informed by the results of those measurements. Cost-benefit (C/B) studies include a range of research that may focus on effectiveness, efficiency, utility or simply overall benefits. Policy concerns and other constraints on (or drivers of) research may favor one sort of C/B study over another. Nowhere is this clearer than in the case of online learning and technology, which by its nature is an excellent candidate for cost-effectiveness (C/E) research.