Costs and Pathways of Homelessness: Developing policy-relevant economic analyses for the Australian homelessness service system helps lay foundations for the development of robust economic evaluation relevant to Australian homelessness policy and service delivery. It explores a range of approaches to understanding and estimating the costs of homelessness and homelessness interventions, particularly those relevant to analysis at the broad policy level. Its focus is the ‘pathways’ approach to costing, and this is investigated with reference to recent international research. Strategic, practical and technical issues for the selection and implementation of methods in the Australian context are discussed. The intention is to provide a map of possibilities, rather than a detailed instruction manual or a comprehensive review of relevant literature and data sources.

The report also examines available resources for costing work in Australia. Having identified the sorts of economic evaluation and costing studies that are likely to be most valuable over the longer term, it then identifies gaps in existing costing data, homelessness research and research infrastructure that are currently limiting progress. The report makes suggestions about how to build capacity for economic evaluation and sketches ideas for costing and research projects that could feasibly be implemented in the short-term. The report does not presume to set out a research agenda. Putting aside the question of available funding for economic evaluation and costing work, this would demand more formal consultation and a more systematic consideration of Australian homelessness policy and program delivery. Different stakeholders will have different priorities and purposes.

Critical areas for future work are identified:

·       The importance of unit costs (service and resource use);

·       The need for longitudinal accounting of costs and benefits;

·       The broad potential of integrated database research;

·       The need to disaggregate populations of those experiencing homelessness; and

·       The need to select methods and tools according to the purpose of the study.

Economists are often viewed with distrust, not only by service providers and practitioners but also by other evaluators in the welfare sector. The distrust and lack of understanding is likely to be mutual, and has long roots in polarized positions on qualitative and quantitative traditions in the social sciences more generally.

The report argues that it is important that economics expertise be present on evaluation teams to ensure adequacy of data collection through the life of a program, and that it is important to encourage costing work within agencies and, more broadly, to encourage people with research interest and capacity working in the sector to become involved in research initiatives in this area.

There is also a need to inform the sector about economic approaches, identifying the ways in which different types of economic and costing study might be relevant to agencies’ operational and advocacy activities, as well as to broader policy issues. Raising awareness of the uses of economic evaluation in the welfare sector will encourage the development of alternative economic arguments and costings.

Existing information on the direct costs of delivering homelessness services in Australia is not adequate for research purposes. This is an obstacle to pathways costing and evaluation. Sound economic data on service delivery is also required for program administration at provider and funder levels. Since all economic evaluation depends on sound program costings, development in this area is of prime importance.