Public policy analysis is a professional service conducted by policy analysts at the federal, state, and local level. If someone is looking to engage with an independent public policy analysis firm, they can face a range of different levels of price and service depending on the depth of the analysis.
An independent public policy analysis can cost anywhere from several thousand dollars for a narrow analysis to over $100,000 for a large, data-heavy analysis project. For many analyses sought by nonprofits, associations, foundations, and local governments, having a budget from $20,000 to $75,000 is a realistic range.
This is a wide range. The reason it is so wide is because policy analyses can range from a relatively straightforward analysis of existing data to a statewide study involving primary survey and interview data collection, economic modeling, and scenario analysis.
What makes a policy analysis more or less expensive?
When scoping a policy analysis, there are a few analytical dimensions that can make the analysis more or less expensive.
An analysis with a narrow scope can be done more cheaply than an analysis with a wide scope. If a question is narrowly defined, analysts can spend less time combing over different areas of the literature and can find more direct ways to answer the question. On the other hand, a scope with many questions that interconnect with one another can lead to multiplying time needs and more elements to an analysis, which drives up costs.
Analyses with small geography can sometimes have lower costs than analyses with wide geography. This is because data collection can be easier on a small scale than on a larger scale. This can work the other way around sometimes, though. There are some datasets that are easier and cheaper to access at the national level than at the local level.
This suggests another cost driver for policy analysis: data availability. Publicly available data that is accessible is much cheaper to procure than data that sits behind a paywall or data that needs to be newly collected. When analysts need to do primary data collection like surveys, focus groups, and interviews, that can drive up costs even higher. It is nice to get new local data, but data collection can easily double or triple the budget of a project or even more. A well-designed randomized sample survey can easily drive an otherwise simple analysis into the six figure territory.
Even if a study is well-defined with a geography that matches easily-accessible data, sometimes methods can drive costs up. Simple descriptive statistics are much less time-intensive for an analyst to assemble than a best-practice cost-benefit analysis, economic impact analysis, forecasting, microsimulation, or other specialized modeling techniques.
Finally, presentation can drive up costs. If the project needs to be polished for public consumption, written to be read by many, presented to the public, designed with graphics, presented to stakeholders, or go through multiple revision iterations, that takes analyst time and resources and can drive up the costs of the analysis.
What ranges can I expect for the cost of an independent policy analysis?
These are some ranges you can think about for a policy analysis.
Focused policy analysis or technical memo: $10,000–$20,000
A policy analysis that is narrowly defined, using publicly available data to produce a concise report of a dozen pages or so, could fall within this range. Not all policy analysis firms will do an analysis of this size because it is often not worth the trouble for them, and a lot of analyses like this are done in house. Working with a social impact firm or a firm focused on small contracts is best for this level of analysis.
Standard independent policy analysis: $20,000–$50,000
This is a typical range for a policy analysis done by a firm like Scioto Analysis. Over the course of a few months, a group of analysts can take a well-defined public policy problem and use techniques like structured policy analysis, cost-benefit analysis, economic impact analysis, or microsimulation to answer a policy question. This usually requires phases of analysis to answer the question and technical rigor that could not be achieved on the minimum budget of a technical memo.
Major study with substantial original analysis: $50,000–$75,000
You’d usually get into this territory if you are trying to add substantial primary data collection to a standard independent policy analysis. Interviews and surveys can drive the cost of analysis up, and using tools like IMPLAN can drive up costs for equipment. Studies like this can also have extra costs associated with quality assurance since they are more complex.
Large, complex, statewide or multi-method study: $75,000–$150,000+
This is where you start getting into the territory that a university might be a competitive partner for a project. Since universities require large overhead costs for external projects, that can drive costs up. Projects like this can take multiple years and include extensive data collection, complex methods, and many levels of analysis and review.
How are policy analyses priced?
Firms price policy analyses in different ways.
A common pricing approach is hourly. A firm will give an hour quote, then charge for the number of hours taken to do the project. This can sometimes lead to overages if a project ends up being longer than expected.
Another is pricing on a project basis. Project pricing means the client is paying for an analysis, not the analyst’s time. These are often paid half up front and half at the end, at project intervals, or at monthly intervals.
Another approach is payment by retainer. Having a policy analysis firm on retainer can help make quicker and simpler analyses more feasible because it eliminates the costs of getting the relationship started, which are steep for independent firms.
Hourly projects lead to the highest likelihood of unexpected cost increases, though they can also lead to savings in some cases. Retainer projects can sometimes lead to wasted hours, but keep transaction costs of bringing a firm on low.
Is a more expensive policy analysis better?
No. The relationship between value and price of a policy analysis is totally dependent on the question a public sector, nonprofit, or foundation client is trying to answer. Sometimes a low-cost policy memo is the best way to answer a given question. Sometimes a muti-year six-figure analysis is the best way to answer it. This depends completely on the question and how it interacts with the cost drivers listed above.
What should I budget for an independent policy analysis?
If you are planning to have a policy analysis done and do not have a detailed scope, budgeting between $20,000 and $75,000 will cover a large portion of policy analysis needed for governments, nonprofits, and foundations. Smaller studies can fall below that range while complex studies can exceed it substantially.
Before setting your budget, define the policy question you want answered, the geographic scope, the data needed to answer it, and how you expect to use it.
If you are trying to determine what kind of analysis fits your research question and budget, email us at rob@sciotoanalysis.com and we would be happy to talk you through a reasonable scope.