Table 1 Comparison of SROI with traditional economic evaluation frameworks
Cost-Effectiveness Analysis (CEA) | Cost-Utility Analysis (CUA) Sub-type of CEA | Cost-Benefit Analysis (CBA) | Social Return on Investment (SROI) |
|---|---|---|---|
Main objective | |||
To compare costs and impact of alternatives within the same domain | To compare costs and impact of alternatives within the same domain | To assess if an intervention is worth the investment. | To assess if an intervention is worth the investment. |
Costs | |||
Monetary value | Monetary value | Monetary value | Monetary value |
Benefits | |||
Benefits linked to health improvements. | Benefits linked to health improvements. | Captures health and non-health impacts. | Captures health and non-health impacts, underpinned by the “triple bottom line” approach (social, economic and environmental). In addition, seeks to account for and value potential negative effect of interventions. |
Reported as natural units E.g. lives saved or cases averted | Reported as Quality Adjusted Life Years (QALYs) gained/ Disability Adjusted Life Years (DALYs) averted/ Healthy life-years gained | Reported as monetary value or welfare benefit | Reported as monetary value or welfare benefit |
Lists benefits that cannot be easily monetised and explains why they cannot be monetised | Uses financial proxies to estimate monetary value of benefits that cannot be easily monetised | ||
Level of application | |||
Intervention level | Intervention level | Usually intervention level | Intervention, project, programme, policy or organisation level |
Timeline of analysis | |||
Retrospective or Prospective | Retrospective or Prospective | Retrospective or Prospective | Retrospective or Prospective |
Discounting of future value | |||
Yes | Yes | Yes | Yes |
Stakeholder engagement | |||
No | No | No | Yes |
Theory of change | |||
No | No | No | Yes |
Main output of analysis | |||
Incremental Cost-Effectiveness Ratio (ICER) | Incremental Cost-Effectiveness Ratio (ICER) | Benefit-Cost Ratio (BCR) | Social Return on Investment Ratio |
Economic Internal Rate of Return (EIRR) | Net Present Value (NPV) | ||
Net Present Value (NPV) | Payback period | ||
Break-even point | |||
Interpretation of main output of analysis | |||
Intervention with higher cost-effectiveness ratio is better | Intervention with higher cost-effectiveness ratio is better | BCR > 1 is worthwhile investment | SROI ratio > 1 is worthwhile investment |
Relevance | |||
Priority setting and resource allocation | Priority setting and resource allocation | Priority setting and resource allocation | Priority setting |
Resource allocation | |||
Stakeholder relationship building, | |||
Accountability framework, Management tool | |||