CTOL – conventional takeoff and landing aircraftVTOL – vertical takeoff and landing aircraftTACV – tracked air-cushion vehicle
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Analysis for Public DecisionsCh. 4: A Basic Framework for Policy Analysis - E.S. Quade Presented by Erin Mihalik
Quick SummaryThis chapter discusses the methodology as if theanalysis were being carried out for a singledecision-maker who commissioned it.
• The successful application of analysis to policy problems is an art.• There are principles and procedures which will offer guidance, but these cannot be followed blindly.
• For policy analysis to be successful, it must: – Discover a course of action that (if not clearly the best available option) is at least satisfactory – Have its findings accepted and incorporated into a policy or decision that can be implemented WITHOUT being so modified that it no longer brings about the desired result.
The analyst’s basic procedure:1. To help the decision-maker determine what he wants.2. To search out the possible ways of getting what he wants3. To work out the consequences that would follow a decision to adopt each of the alternatives, and4. To rank the alternatives according to a criterion specified by the decision-maker (or to present them to him for ranking along with the necessary information)
The Problem…Public decisions don’t always fit into the “basicprocedure”
BUT, even so, the “basic procedure” is a goodstarting point and a reasonable strategy fordiscovering good solutions.
The Elements of Analysis1. The Objective2. The Alternatives3. The Impacts4. The Criteria5. The Model (or Models)
1. The ObjectivesThe objectives are what a decision-maker seeksto accomplish or attain by means of his decision. One of the hardest tasks an analyst has is to discover if the stated objectives are REALLY the objectives desired!
2. The Alternatives• The alternatives are the options or means available to the decision-maker by which, it is hoped, the objectives can be attained.
Juvenile Delinquency, for example…Alternatives don’t have to be obvious! Education… Recreation… So what are some Family Police alternatives for subsidy…. surveillance… combatting juvenile delinquency? Low-income housing… And whatever other options we might discover later!
3. The ImpactsThe designation of a particular alternative as themeans of accomplishing the objective implies acertain set of consequences. Some of theseconsequences are benefits and others are costs. Huh??? In English It just means that no matter whichplease, Mr. E.S. Quade! alternative we choose, there will be positive and negative side effects!
The ImpactsThere may be other impacts associated with analternative that, while they have little effect onthe attainment of the desired objective, theyshould still be considered. These are calledspillovers or externalities.
By broadening the objectives, the externalitiescan be internalized or made part of the study.
• In the narrow sense, costs are the resources required to implement an alternative that is no longer available for other uses once it is implemented.• In the broadest sense, costs are the “opportunities foregone” – all the things we cannot have or do once we have a particular alternative.
Many, but not all, costs can be expressed indollars or other quantitative terms. One example would be traffic fatalities.
Traffic Fatalities Example:This example includes things that can andcannot be expressed quantitatively.Delay caused to motorists by lowering the speedlimit can be partially expressed quantitatively…But things like irritation to the drivers andspeeding elsewhere might lead to MOREaccidents! This is very hard to quantify.
4. The CriteriaA criterion is a rule or standard by which to rankthe alternatives in order of desirability.This provides a way to relateobjectives, alternatives, and impacts.
5. The ModelAny decision analysis needs a process that can predict orindicate the consequences that flow from an alternative.This is provided by the model.Abstractly, a model is just a set of generalizations orassumptions about the world. It’s a simplification of thereal world.Policy Models are usually elaborate mathematicalstructures programmed for a computer.Other models are simple mental models and usedthroughout the analytic process.
The Process of AnalysisWhen searching for the best alternative, we gothrough 5 stages that must be linked togetherand repeated several times.
The Five Stages• Formulation – clarifying and constraining the problem and determining objectives.• Search – identifying, designing, and screening the alternatives.• Forecasting – predicting the future environment or operational context.• Modeling – building and using models to determine the impacts.• Evaluation – comparing and ranking the alternatives.
The Importance of Being Repetitive Sure! But it’s very possible that you don’t fully understand your problem, so I’m going to ask you aI have a problem I want lot of repetitive questions so we canyou to help me analyze. solve the REAL issue!
Successful analysis depends upon a continuouscycle of:• Formulating the problem• Selecting objectives• Designing alternatives• Building better models
RepetitionIt’s important to cycle and recycle through thequestions so the answers become more focused. Are you sure? Really sure? ???
The Iterative Nature of Analysis Determining Clarifying the objectives and problem criteria Searching outOpening new and designingalternatives alternativesQuestioning ITERATION! Collecting dataassumptions and informationInterpreting Building and results testing models Evaluating costs Examining and alternatives for effectiveness feasibility
FormulationFormulation encompasses an attempt to isolatethe questions or issues involved to fix thecontext within which these issues are to beresolved, to clarify the objectives, to discoverthe major factors that are operative, and to getsome feel for the relationships among them. This stage is SUPER important! All the time we spend redefining theproblem helps to make the problem much more clear. A clear problem helps us find a better solution!
An Example… Eh-hmmmmm!!!Tell me about your There’s way too much turnover in my training problem… program! Everyone seems to quit or get fired! Help me reduce the turnover!!
The same “problem” can have different perspectives from different levels within the company! My company doesn’t HAVE aturnover problem. We train people to do dangerous jobs – if the turnover’s high, it’s in the safety Well, thatinterest of those we terminate and certainly changes the other workers! I don’t want things! anyone getting hurt!
To solve one problem, you may need to solve other problems, first!• For example, urban air pollution.First you need to consider other aspects of citylife, like local transportation and controls… andthese might affect housing and jobs!A systematic investigation of these issues mightalter your perception of the issue.
Formulation is highly subjectiveWe consider what facts will be meaningful to the decision-maker.In the transportation example, we should consider the practicalthings, but we can leave the outlandish hypotheticals at home!
SearchThe search phase is concerned with finding thealternatives and the data and relationships on whichthe analysis is to be based. It is usually moreproductive to look for additional alternatives than it isto look for more precise schemes for comparison. It’s important to consider a wide range of alternatives!
Search is the activity that depends moston talents that the analyst may not have. Legal! Scientific! Economic! Sociology! Engineering! Artistic! Medical! Cost Analysis! Language!An analyst’s success may often depend on the technical competence of his associates!
Every system belongs to a hierarchy.There are subsystems for every system andthere are wider systems that the system you’restudying forms a subsystem. Clear thinking will be necessary to find the links between all these systems so I can formulate all the costs and benefits! Your System
Forcasting• The impacts or consequences that follow from the decision to accept and implement a particular alternative depend upon both: – The properties of the alternative, AND – On the situation or environment that exists when and during the time the alternative is to be effective.
The Transportation Example…• The population distribution in the region may affect the choice of routes and carriers. – If the population is evenly distributed, carriers who can make many stops will be preferred.
Scenario writing• In policy studies, predictions of the future environment is most often done by scenario writing.• A scenario is a description of the essential features of the future context in which the alternatives are to be implanted.• Scenario writing is the preparation of a logical sequence of hypothetical (but credible events) that could lead from the present to the future. Exactly! Personal commuter dragons aren’t Does that mean no exactly … credible. personal commuter dragons?
Modeling• Building a model of the system and its environment is the standard approach to compare the costs associated with different ways of operating a future system.• A model could be a simple table or graph, or it may be written in a mathematical language.• If you are lucky, the same model can be used to predict outcomes from a competing system – if not, another model must be built.
Systems Engineering ModelsThe end objective is to optimize the performance of a system, so themodel building must be subservient to this objective. A systemsengineering team must:1. Ensure model building is carried out with a sense of purpose (designed as efficiently as possible)2. Tie together the various specializations that may be needed for building models of the subsystems.3. Ensure that work is concentrated where it is most needed. As a general rule, models should be kept as simple as possible.4. Decide when the model is adequate for the purposes for which it is needed5. If the model is used for planning, see that an effective dialogue is conducted between the systems team and the managers who will use the model. This dialogue must start when the model is BEING built.
EvaluationSystems analysis has used two principal conceptual approachesto rank the alternatives:1. Fix the task or the level of effectiveness and then seek to determine the alternative which is likely to achieve this level of effectiveness or accomplish the task at the lowest cost.2. Fixed budget. For a specified cost level or budget to be used in attaining the objective the analysis attempts to determine which alternative will produce the highest effectiveness. The ideal is to do more than to prepare a comparison of the alternatives ; we also want to rank them according to criteria, so the decision-maker’s choice is easier!
Cost-Effective Approach• Cost-effectiveness approaches are useful when the relative merit of numerous proposals is under investigation.• It is not as useful when the question is one of absolute merit (such as in deciding between funding adult education or highway construction).
Fixed Budget Approach• This can be useful for questions of absolute merit, even if we can’t measure accomplishment in a clear way.• We can “normalize” the alternatives and develop a table of comparative effectiveness measures (this can be both qualitative and quantitative). Then decision-makers may be able to decide on the basis of their own subjective criteria which type of program they prefer.
• When decision-makers are judging whether something is worth the cost, the most common approach is to express the benefits and costs associated with each alternative in dollars as a function of time, discount the future benefits and costs at some appropriate rate, and compare the alternatives on the basis of the present value of net benefits.• Alternatives can also be compared on the basis of the internal rate of return (discount rate so NPV=0). This is the “classical” cost-benefit approach – it’s hard to use well when analyzing complex policy issues.
• It may not be possible for the analysts to prepare an unambiguous ranking of the alternatives.• When this occurs, the best scheme may be to list the characteristics and impacts of the alternatives and let the decision-makers determine the ranking using their own judgment.
No method of comparison is likely to answer all the questions. What if my method of comparison isn’t able to answer all the questions Don’t worry!! No method of the decision-makers want comparison is going to answer to consider? ALL the questions. Just do your best to anticipate and answer as much as you can!
Conclusive Summary• Even if the model and its inputs are excellent, the conclusions proposed may be unacceptable due to reasons based on morale, tradition, politics, and organizational behavior.• It’s important for the analysis USER to distinguish what the study actually shows from any recommendations made by the analyst based on what the analyst FEELS should be done. – Some say an analyst should not even make his conclusion known.
• Whether or not the decision-maker made a right decision based on analysis can never be verified. Even long after the decision has been made, we may still have no way of telling whether the best action was chosen.
The Process Illustrated• There are as many ways to approach a problem as there are analysts.• We’ll take a look at one example…
Short-Haul TransportationIn this example, we turn to short-haul transportation systemsabout 10-15 years in the future.Item Cost BeneftJet aircraft Serious noise and air polution Reduced travel timeAutomobiles Pollution, personal injuries, Increased individual energy shortages, urban sprawl mobilityHigh-speed railways Noise pollution; land requiredSo this study must consider the following:Obvious Considerations Less ObviousTime saved Environmental effectsMonetary Cost Societal effectsAdditionally, how the costs/benefits are distributed amongsocial groups and localities must be considered.
Potential procedure for carrying out the analysis: Choice of a criterion: selection of impacts Design of alternative systems Building Design of models to Prediction of Comparison cases for predict impacts of cases comparison impactsPrediction of operational context
The impacts must be worked out on a case-by-case basis In the transportation hypothetical, we have the following categories:Impact ImpactedTransportation service impacts Occur to users of the system.Financial impacts Occur to the operators and societyEconomic impacts Involve changes in income and employmentCommunity impact Changes in the activity patterns, tax base, and environmentDistributional impacts This considers how the various aggregate impacts are distributed among different social groups and locations
Developing the model…Because in this example, there are so manyimpacts which are diverse and difficult to valuemonetarily, the desirable approach would be topresent the impacts in their natural units to beranked by the decision-makers.
Example of a model illustrating impact values…Impacts Base VTOL TACV Impacts Base VTOL TACV CTOL case case CTOL case case case caseTransportation service Community impactsimpactsPassengers (millions yearly) 7 4 9 Noise (thousand households 10 1 20Door-to-door trip time (avg 2 1.5 2.5 Air pollution (% all emissions) 3 9 1hr)Door-to-door trip cost (avg. 17 28 20 Petroleum savings (%) 0 -20 +30in $)Airport congestion (% 0 5 10 Households displaced 0 20 500reductionFinancial Impacts Land taken (acres) 0 25 8000Investment costs ($ 150 200 2000 Taxes lost ($ millions) 0 0.2 2.0millions)Net annual subsidy ($ 0 0 90 Landmarks destroyed None None Ft. Xmillions)Economic impacts (peak yr Distribution impactsAdded jobs (thousands) 20 25 100 % low-income trips taken 7 1 20Added sales ($ millions) 50 88 500 % of noise-impacted low- 2 16 40 income households
• Having developed the required models, measures of the various impacts are obtained and the set presented to the decision-makers for their inspection in the form of a “scorecard”.• This alone can’t be expected to complete the analytic work, for the decision-makers will have questions and will want additional comparisons made and further systems and mixes of alternatives investigated.• But after these questions are answered, the decision maker will be in a better position to make a decision than before the analysis.
Analysis for Public DecisionsCh. 4: A Basic Framework for Policy Analysis - E.S. Quade Presented by Erin Mihalik Questions?