This research brief describes how to conduct a cost-effectiveness analysis. The first task is to find out if there are differences in the costs of operating program alternatives through the following steps: (1) describing each program alternative and its components and potential benefits; (2) determining the costs of the alternatives by identifying cost factors, deciding on the data entry method, entering the cost data, and calculating the program costs; (3) determining cost savings; and (4) calculating and analyzing program costs. The second task is to determine whether there are differences in the effectiveness and cost effectiveness of feasible program alternatives. The third task is then to calculate and analyze cost-effectiveness ratios before moving to the final step of making decisions with cost analysis results. In the final analysis, all educational decisions, from the student-teacher interaction to the formulation of national policy, are cost utility data. (SLD)