A Cost-Benefit Analysis of Community Versus Institutional Living

As part of a project to develop a model procedure for returning residents of institutions to the community, the Commonwealth of Virginia contracted with a consulting firm to develop a methodology for conducting a cost-benefit analysis of institutional versus community living. The methodology was used to project costs and benefits over a ten-year period for 52 clients successfully placed in the community through the project, called Service Integration for Deinstitutionalization (SID). The results showed an average net saving for each client of $20,800 over a ten-year period, mostly to the state government. The authors describe the methodology used in the analysis, the cost and benefit elements considered, and the adjustments made for economic factors that could not be measured directly.