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1 Identify the evaluation problem.

2 Determine the audience and perspective for the evaluation.

3 Select the appropriate type of economic analysis and research design in relation to the theory of change.

4 Establish the need for chosen economic evaluation.

Before beginning an economic evaluation, it is important to establish the analytical framework that will be utilized. This framework consists of identifying the nature of the problem and the theory of change, clarifying the specific alternatives that should be considered in the analysis, establishing the identity of the audiences—and the perspective—for the analysis, and selecting the type of cost analysis to use. These tasks are all preparatory to the actual research inquiry, data collection, and analysis, which are addressed in subsequent chapters. At the initial stage, it is important to consider the extent and scope of the inquiry to ensure that the economic evaluation is appropriate and justifiable.

In this chapter, we discuss these issues in turn. Although they might seem outside the scope of a direct economic evaluation, establishing the appropriate structure for the research inquiry is critical. It is going to be very difficult to rederive new estimates of costs and benefits if the research questions change. Importantly, the research findings will depend on how the research is framed. Hence, we describe key issues in establishing the analytic framework for economic evaluation.