Pitfalls in benefit-cost analysis of birth prevention

Abstract The paper summarizes the procedure usually employed by Enke, Meier and others to estimate the benefit-cost ratio of a prevented birth. Some possible deficiencies in the formulation, the possible lack of relevance of the resulting computations, are considered. For example, since the benefit-cost ratios are exceptionally high they would imply unusually high rates of investment for family planning. The results would also apply for the birth prevention of not only high parity births, but also for first and second children. Some arguments are presented which suggest the possibility that the income distribution might be worsened as a consequence of the application of a family planning programme based on these principles - especially those which employ subsidies to induce the practice of family limitation. In addition it is also argued that the average economic quality of the population may be lower than otherwise as a consequence of such programmes, and that the consequences of such events are not taken into account in the usual formulation. Also the usual estimates of costs of such programmes are questioned since the relation between acceptances and births prevented are unknown given the lack of knowledge about the substitution between the proposed methods of family limitation and other means of population control. Finally, we present a model based on reasonable but different assumptions than the formulation popularized by Enke and others, and show that on the basis of this model it is possible to obtain results which are the exact opposite of the Enke model. Also it is argued that the model presented is much more sensitive to actual data than the usual formulation.