Understanding Opportunity Costs and the Economist’s View: A Response to Scriven's "The Economist's Fallacy"

Abstract

Of course, the concept of opportunity costs has generally remained in the domain of economists and its understanding and acceptance are not universal in other fields, including evaluation. Indeed, in the last issue of the Journal of Multidisciplinary Evaluation (JMDE), Michael Scriven spoke out against the use of opportunity costs in evaluation. Unfortunately, what may appear to Scriven to be flaws of logic and utility in the economists’ concept of cost are the result of some common misunderstandings about what a “cost” is—at least in terms of how economists use the term. However, I believe that the points raised by Scriven can be either corrected or clarified in a way that will illustrate why opportunity costs are a useful and important concept for evaluators.

Keywords

• opportunity cost
• costs in evaluation
• commentary