Approaches to Narrow Cost Analysis

This is the second in a series on narrow cost analysis. The aim of the series is to help Child Care and Development Fund (CCDF) Lead Agencies understand the requirements, approaches, and uses of a narrow cost analysis. Defining Narrow Cost Analysis (the first in this series) outlines the requirements for a narrow cost analysis. They also are described in the Office of Child Care's Program Instruction for CCDF Lead Agencies, "Guidance on Alternative Methodologies and Cost Analyses for Purposes of Establishing Subsidy Payment Rates." This report, Approaches to Narrow Cost Analysis, describes three widely used approaches: cost models; limited cost surveys; cost models informed by limited cost surveys. We describe how to use each approach in your state or territory, drawing on state examples and expert advice. We define italicized key terms in a glossary at the end of this report.