Resources Used to Produce Individual Development Accounts in the First Two Years of the Experimental Program of the American Dream Demonstration at the Community Action Project of Tulsa County

This paper describes an attempt to measure resources used to produce Individual Development Accounts in a program run by the Community Action Project of Tulsa County. The experimental design of the program—participants were selected from applicants at random—aims to inform the overall evaluation in the American Dream Demonstration of whether IDAs are likely to achieve their intended purposes costeffectively. Financial benefit-cost analysis is a key part of this evaluation, and the estimates of resource use in this paper are key inputs to the financial benefit-cost analysis. Financial costs are estimated from the points of view of seven groups of stakeholders: IDA participants, non-participants, the federal government, state and local government, the employees of IDA programs, private donors, and society as a whole. This paper documents estimates of cost from the point of view of society as a whole (about $53,000 for 1998 and about $135,000 for 1999) and acts as template to guide cost-measurement for the rest of the years of the project. Resources consumed (costs) by the experimental program are taken as the stock of resources at the start of the year, minus the stock of resources at the end of the year, minus resource inflows during the year. There is no attempt to measure costs that cannot be valued in financial terms nor to measure benefits of any kind. Thus, this paper is not a financial benefit-cost analysis. Subject to a plethora of caveats, qualifications, and assumptions, the broad result derived here is that participation in the experimental program costs society about $125 per participant-month.

Project: American Dream Policy Demonstration (ADD)