To better understand this first definition of impact evaluation, we can use an example:
“We want to assess the impact of the induction received by workers on their first day of work on their productivity.
Specifically, we are going to work with a company that collects letters from mailboxes.
…the productivity of the postman is measured by the number of letters he/she collects or the number of mailboxes checked in a day.
The goal of an induction is to familiarize the worker with procedures, schedules and routes.
In principle we would expect that a postman who attends the induction will have better tools to collect as many letters as possible from their first days of work.
But this is something we BELIEVE SHOULD HAPPEN… AND WE SHOULD CHECK IF WE ARE RIGHT.
What we achieve through the evaluation of the induction on the first day of work of the postmen (program) is to know how many letters a postman who receives the induction will collect on his/her first day of work (the beneficiary outcome) with respect to the number of letters that this same postman would collect if he/she had not received the induction (the counterfactual outcome).
For example, let's consider that the postman who received induction can collect 80 letters per day (10 letters per 8 hours of work), whereas if the postman had not received induction, he/she would have collected 64 letters per day (8 letters per 8 hours of work).
This indicates that the effect of the induction on the productivity of the postman is 16 letters per day. This difference measures exactly what impact the induction has on postmen productivity.”
This example is useful to guide the letter collection company in quantifying: The benefits it receives from the induction / whether this induction program proves to be cost effective for the company.
In other words, based on the outcome of the evaluation, a cost-benefit analysis of the induction can be made.
Postmen who receive induction collect 10 letters per hour and postmen who do not receive induction collect 8 letters per hour.
This means that induction causes postmen to collect 2 additional letters per hour.
Postmen with induction are 25% more productive in one hour of work.
If the company needs to collect 40 letters per hour throughout the city, this would be done by 4 postmen with induction (4*10=40) or 5 postmen without induction (5*8=40).
The company needs to assess whether it is more profitable to invest in induction (pay the cost of induction for the 4 postmen) or to hire five postmen without providing induction.
This would be the way to find out which of the two policies is the most profitable or beneficial for the company.