Positive returns: cost-benefit analysis of a stunting intervention in Indonesia

Would investing to reduce stunting reap economic benefits that outweigh costs? We investigate this question by conducting a cost-benefit analysis for a large-scale integrated nutrition programme to reduce stunting in Indonesia, using actual rather than stylised data on costs. The gains are assumed to accrue from productivity enhancement from reduced malnutrition, productive earnings from deaths averted and household savings from diarrhoea costs avoided. The programme extends to six provinces over 5 years covering seven cohorts. Using a discount rate of 5 per cent, the benefit-cost ratio is 2.08. The study finds positive net benefits through the productivity impact of lower malnutrition even with sensitivity analysis that excludes the benefits of mortality reduction.