What is a key limitation of using cost per capita as a performance indicator?

• A. It does not necessarily reflect effectiveness
• B. It always indicates quality
• C. It perfectly predicts crime levels
• D. It is the only indicator needed

Answer: (A)

Cost per capita as a performance indicator focuses on inputs—how much is spent per person—rather than the results achieved. A key limitation is that it does not necessarily reflect effectiveness. You can spend a lot per resident and still see limited improvements in crime reduction, community safety, or trust, while efficient, lower-spending programs might achieve strong outcomes. This measure can also be influenced by factors like population size and living costs, which can obscure how well services are performing. To truly gauge performance, you need outcome and quality indicators that show what changes occurred because of the resources used. The other statements aren’t accurate: spending more per person does not automatically indicate higher quality, it does not perfectly predict crime levels, and it should not be the only indicator used.