Opportunity Costs

Opportunity costs refer to cost in terms of forgone alternatives. These costs may be measured in many ways, including dollars, but also in time, good will, knowledge, and so on. For example, if a school district decides to purchase new textbooks, the opportunity cost is that something else might have been done with that money. In buying new textbooks, the school district has relinquished the opportunity to provide professional development of teachers, build a playground, or reduce the budget deficit. Particularly in program evaluation, the concept of opportunity cost can be useful, although, in fact, there is seldom a serious analysis of the opportunity costs of the evaluand.

[Page 286]This is, in part, because one must step outside the parameters of the evaluand as it is and examine it in a context of what might have been.