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Using Performance Standards to Evaluate Social Programs With Incomplete Outcome Data: General Issues and Application to a Higher Education Block Grant Program

Northwestern University

John Newman

World Bank

John V. Pepper

University of Virginia

The idea of program evaluation is both simple and appealing. Program outcomes are measuredand compared to some minimum performance standard or threshold. In practice, however, evaluationis difficult. Two fundamental problems of outcome measurement must be addressed. Thefirst, which we call the problem of auxiliary outcomes, is that we do not observe outcome of interest.The second, which we call the problem of counterfactual outcomes, is that we do not observethe threshold standard. This article examines how performance standards should be set andapplied in the face of these problems in measuring outcomes. The central message is that theproper way to implement standards varies with the prior information an evaluator can crediblybring to bear to compensate for incomplete outcome data. By combining available data withcredible assumptions on treatments and outcomes, the performance of a program may bedeemed acceptable, unacceptable, or indeterminate.

Key Words: program evaluation • performance standards • counterfactual outcomes • auxiliary outcomes

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