EA - Cost-effectiveness of operations management in high-impact organisations by Vasco Grilo

Link to original articleWelcome to The Nonlinear Library, where we use Text-to-Speech software to convert the best writing from the Rationalist and EA communities into audio. This is: Cost-effectiveness of operations management in high-impact organisations, published by Vasco Grilo on November 27, 2022 on The Effective Altruism Forum.SummaryFollowing up on the challenge to quantify the impact of 80,000 hours' top career paths introduced by Nuño Sempere, I have estimated the cost-effectiveness of operations management in high-impact organisations (OM), which arguably include 80,000 Hours’ top-recommended organisations.The results for the mean cost-effectiveness of various metrics in bp/G$ in terms of existential risk reduction are summarised in the table below for my preferred method. I present all results with 3 digits, but I think their resilience is such that they only represent order of magnitude estimates (i.e. they may well be wrong by a factor of 10^0.5 = 3).Mean cost-effectiveness (bp/G$) of.Global health and developmentLongtermism and catastrophic risk preventionAnimal welfareEffective altruism infrastructureThe effective altruism communityOperations management in high-impact organisationsMethod 3 with truncation0.4313.951.623.201.557.01AcknowledgementsThanks to Abraham Rowe, Dan Hendrycks, Luke Freeman, Matt Lerner, Nuño Sempere, Sawyer Bernath, Stien van der Ploeg, and Tamay Besiroglu.MethodsI estimated the cost-effectiveness from the product between:The cost-effectiveness of the high-impact organisations, which I assumed equal to that of the effective altruism community.The multiplier of OM, which I defined as the ratio between the cost-effectiveness of OM and the high-impact organisations.This method assumes the cost-effectiveness distribution of the high-impact organisations is represented by the one theorised for the effective altruism community in the next section. Moreover, the cost-effectiveness estimates are only accurate to the extent that future opportunities are as valuable as recent ones.The calculations are in this Colab.Cost-effectiveness of the effective altruism communityI calculated the cost-effectiveness of the effective altruism community from the mean cost-effectiveness weighted by cumulative spending between 1 January 2020 and 15 August 2022 of 4 cause areas:Global health and development.Longtermism and catastrophic risk prevention.Animal welfare.Effective altruism infrastructure.These are the areas for which Tyler Maule collected data here (see EA Forum post here). I adjusted the 2020 and 2021 values for inflation using the calculator from in2013dollars.I computed the cost-effectiveness of each area using 3 methods. All rely on distributions which are either truncated to the 99 % confidence interval (CI) or not truncated, in order to understand the effect of outliers. The parameters of the pre-truncation distributions, which are the final distributions for the non-truncation cases, are provided below.Method 1I defined the cost-effectiveness of longtermism and catastrophic risk prevention as a truncated lognormal distribution with pre-truncation 5th and 95th percentiles equal to 1 and 10 bp/G$ in terms of existential risk reduction. These are the lower and upper bounds proposed here by Linchuan Zhang.I assumed the ratio between the cost-effectiveness of i) longtermism and catastrophic risk prevention and ii) global health and development to be a truncated lognormal distribution with pre-truncation 5th and 95th percentiles equal to 10 and 100. These are the lower and upper bounds guessed here by Benjamin Todd for the ratio between the cost-effectiveness of the Long-Term Future Fund (LTFF) and Global Health and Development Fund (search for “10-100x more cost-effective”).I considered the ratio between the cost-effectiveness of i) animal welfare and ii) global health and development to be a truncated lognormal distribution with pre-truncation 5th and 95th percentiles equal to 270 μ and 211....