The UK Ministry of Defence (MOD)'s Defence Science and Technology Laboratory (Dstl) commissioned RAND Europe to examine different approaches to assessing UK Defence's contribution to national prosperity. The analysis it contains seeks to inform a better understanding of different methodologies that could help the MOD to quantify the value that defence brings to the nation (e.g. in terms of security, influence and prosperity).

Understanding the Ministry of Defence's Wider Contribution to UK Prosperity

Measuring Defence Output

Luke Huxtable, Kate Cox, James Black, Keith Hartley, Ronald E. Smith, Matthew Uttley, Benedict Wilkinson, Charlene Rohr, Hui Lu

ResearchPublished Jul 14, 2021

Despite the growing policy emphasis on understanding the value of UK defence, assessing the primary benefits of defence remains a challenge. Defence is inherently complex, and it remains difficult to prove that the non-occurrence of an event (e.g. a conflict) is directly related to the existence of defence capabilities and activities. Linked to these challenges, connecting defence activity and output to defence outcomes and benefits remains elusive.

This study has explored the potential of five methodologies (lines of enquiry — LOEs) to measure the contribution of defence to UK prosperity in terms of its primary benefits (i.e. protection from external threats). These are:

  • LOE1 — defence analogue to Quality Adjusted Life Years (QALYs)
  • LOE2 — Value of a Statistical Life (VSL) measures;
  • LOE3 — insurance policy techniques;
  • LOE4 — logic models and proxy indicators; and
  • LOE5 — discrete choice experiments (DCEs).

This study has identified a range of insights for the Ministry of Defence on how to apply and further develop these methodologies towards measuring the primary benefits of defence. This study has been exploratory, and it was expected that not all approaches would be viable.

Key Findings

  • Based on the research into the five individual LOEs, it is apparent that whilst none offer a comprehensive solution in their own right, PALYs (LOE1), VSL (LOE2), logic models and proxy indicators (LOE4) and DCEs (LOE5) each offer opportunities that could pave the way for an improved understanding of defence's contribution to prosperity.
  • Insurance techniques (LOE3) cannot measure primary benefits, but could support defence decision-making by helping to conceptualise, manage and 'price' defence risks.

Recommendations

The MOD should consider taking forward the research from this study in the following ways:

  • Develop an improved understanding of how defence contributes to national prosperity, by further developing and refining the defence logic model (LOE4).
  • Improve the understanding and quantification of public perceptions of defence, its benefits and opportunity costs through the use of a DCE (LOE5).
  • Consider the development of new approaches to quantify (and possibly monetise) the benefits of defence, especially through PALYs (LOE1) and VSL (LOE2).
  • Employ proxy concepts for assessing the benefits of defence where actual measures of benefit cannot be identified or developed (see specific suggestions under LOE4).
  • Engage with insurance industries to identify which techniques might help to improve the MOD's management, modelling and pricing of defence risk.
  • Apply each assessment framework to a particular area, such as a specific mission-type, to test the application of multiple methods to a specific question of quantifying primary benefits of defence.

Topics

Document Details

  • Copyright: RAND Europe Community Interest Company
  • Publisher: RAND Corporation
  • Availability: Web-Only
  • Year: 2021
  • Pages: 65
  • DOI: https://doi.org/10.7249/RRA638-1
  • Document Number: RR-A638-1

Citation

RAND Style Manual
Huxtable, Luke, Kate Cox, James Black, Keith Hartley, Ronald E. Smith, Matthew Uttley, Benedict Wilkinson, Charlene Rohr, and Hui Lu, Understanding the Ministry of Defence's Wider Contribution to UK Prosperity: Measuring Defence Output, RAND Corporation, RR-A638-1, 2021. As of October 12, 2024: https://www.rand.org/pubs/research_reports/RRA638-1.html
Chicago Manual of Style
Huxtable, Luke, Kate Cox, James Black, Keith Hartley, Ronald E. Smith, Matthew Uttley, Benedict Wilkinson, Charlene Rohr, and Hui Lu, Understanding the Ministry of Defence's Wider Contribution to UK Prosperity: Measuring Defence Output. Santa Monica, CA: RAND Corporation, 2021. https://www.rand.org/pubs/research_reports/RRA638-1.html.
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The research described in this report was commissioned by the UK Ministry of Defence (MOD)'s Defence Science and Technology Laboratory (Dstl) and conducted by RAND Europe.

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