| Cash transaction
|
An actual cash saving or cash spent by the stakeholder group. For example:
- A reduction in welfare payments is a direct cash benefit to the Government
|
| Value of resource reallocation
|
A program or service results in outcomes that allow resources to be used in different ways. For example:
- A reduction in crime may not result in less cost to the justice system because there is not a change in the overall costs of managing the justice system (so it is not a "cash transaction"). However, a value can be placed on the amount of resources that can be reallocated for other purposes
|
| Revealed preferences
|
This is when a financial proxy is inferred from the value of related market prices. This can be achieved in the following ways:
- Is there something in a stakeholder's group behaviour that will reveal the value of an outcome? For example, we may observe that stakeholders with less depression are now socialising more and going out for dinner with friends. The financial proxy is therefore the value of the dinners
- Through stakeholder consultation, is there a similar service or program that would achieve the same amount of change? This is often referred to as a "replacement valuation"
|
| Stated preferences
|
This is when stakeholders are explicitly asked how much they value an outcome. This can be done in a number of ways:
- Stakeholders are asked their "willingness-to-pay" or willingness-to-avoid" to achieve the outcome
These are hypothetical cash transactions.
- Stakeholders are asked to make a choice based on a series of options presented to them through "participatory impact" exercises. This can also be referred to as "choice modelling".
|
