What Are the Most Cost Effective Things?

If I told you it's possible to deliver an extra year of ideal primary-level education for under $1, would you believe me? Hopefully not - the claim is absurd on its face.

 But it may be true nonetheless. The very best education interventions are phenomenally cost-effective, and they're not the kinds of things you'd expect, says Dr Rachel Glennerster.

 She's Chief Economist at the UK's foreign aid agency DFID, and used to run J-PAL, the world-famous anti-poverty research centre based in MIT's Economics Department, where she studied the impact of a wide range of approaches to improving education, health, and governing institutions. According to Dr Glennerster:

 "...when we looked at the cost effectiveness of education programs, there were a ton of zeros, and there were a ton of zeros on the things that we spend most of our money on. So more teachers, more books, more inputs, like smaller class sizes - at least in the developing world - seem to have no impact, and that's where most government money gets spent."

 "But measurements for the top ones - the most cost effective programs - say they deliver 460 LAYS per £100 spent ($US130). LAYS are Learning-Adjusted Years of Schooling. Each one is the equivalent of the best possible year of education you can have - Singapore-level."

Links to learn more, summary and full transcript.

"...the two programs that come out as spectacularly effective... well, the first is just rearranging kids in a class."

 "You have to test the kids, so that you can put the kids who are performing at grade two level in the grade two class, and the kids who are performing at grade four level in the grade four class, even if they're different ages - and they learn so much better. So that's why it's so phenomenally cost effective because, it really doesn't cost anything."

 "The other one is providing information. So sending information over the phone [for example about how much more people earn if they do well in school and graduate]. So these really small nudges. Now none of those nudges will individually transform any kid's life, but they are so cheap that you get these fantastic returns on investment - and we do very little of that kind of thing."

In this episode, Dr Glennerster shares her decades of accumulated wisdom on which anti-poverty programs are overrated, which are neglected opportunities, and how we can know the difference, across a range of fields including health, empowering women and macroeconomic policy.

Regular listeners will be wondering - have we forgotten all about the lessons from episode 30 of the show with Dr Eva Vivalt? She threw several buckets of cold water on the hope that we could accurately measure the effectiveness of social programs at all.

According to Vivalt, her dataset of hundreds of randomised controlled trials indicates that social science findings don’t generalize well at all. The results of a trial at a school in Namibia tell us remarkably little about how a similar program will perform if delivered at another school in Namibia - let alone if it's attempted in India instead.

Rachel offers a different and more optimistic interpretation of Eva's findings. To learn more and figure out who you sympathise with more, you'll just have to listen to the episode.

Regardless, Vivalt and Glennerster agree that we should continue to run these kinds of studies, and today’s episode delves into the latest ideas in global health and development.

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The 80,000 Hours Podcast is produced by Keiran Harris.