Maximizing benefits in project selection: a hybrid approach

Shang Wu, Jenna Toussaint and Kent Messer ()

Applied Economics, 2017, vol. 49, issue 40, 4071-4082

Abstract: Charitable foundations and government programmes should endeavour to allocate their limited resources to best serve their constituents. Yet, mathematical programming techniques are rarely used despite overwhelming evidence of their superiority in selecting projects that yield higher levels of total benefits. We present a novel ‘hybrid selection model’ that combines binary linear programming and heuristic rank-based models applied to two case studies. The first case focuses on providing services to women and shows a hybrid model would have selected the top three ‘signature’ projects and maintained an above-average overall project benefit while securing a 180% improvement in the number of projects funded, a 66% improvement in the number of women served and a 132% improvement in the total benefit achieved. In the second case, we apply the hybrid approach to data from the US government’s largest forest preservation programme and demonstrate that the hybrid approach could allow the programme to select up to 11 top-scoring projects while still achieving a 97% gain in the total overall benefit compared to their traditional method. These case studies show that the hybrid approach has the potential to be applied in a variety of settings and improve how foundations and programmes achieve their goals.

Date: 2017
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DOI: 10.1080/00036846.2016.1276267

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