Research School Network: Sunk cost fallacy and Pupil Premium Strategies – ensuring effective provision This blog considers how sunk cost effect can inhibit effective monitoring/​evaluation and how to avoid this with PP stratgies

The concept of the sunk cost fallacy in organisational leadership is not a new idea. Most school leaders are probably well aware of it and recognise that it is likely happening in their schools. Yet, as Dr Simon Breakspear puts it, rather than pruning our work and interventions, many schools remain stuck in the ​“additive trap”.


The problem with the sunk cost fallacy/​effect is that it exists in the depths of a messy knowing-doing gap, driven by innate psychology that is hard to avoid. The sunk cost effect refers to the tendency of people to continue investing resources (i.e. time, money, and effort) into a project or activity that is no longer favourable or feasible because of the prior investment that cannot be recovered (Chen et al., 2024).

Chen and colleagues neatly summarise the theories behind this, suggesting that the sunk cost effect could be attributed to:

- Waste avoidance theory – people feel a strong aversion to the thought of resources being wasted and, as such, persist in activities to justify their initial investment.

- Self-justification theory – argues that individuals, especially those in leadership roles, may continue to invest in order to justify their earlier decisions or to save face.

- Prospect theory – people are loss-averse and therefore may continue to invest in a failing project because the pain of losing feels greater than the benefits of stopping.

- Regret aversion theory – proposes that people continue investing in projects to avoid the regret they might feel if they stop and later realise stopping was the incorrect decision — essentially the ​“but what if…” mindset.

- Adaptive learning theory – the sunk cost effect may develop due to a learned tendency to persist in previously rewarding actions, even when conditions change.

The reason why I am so interested in this is because I have recently been talking to some leaders about monitoring and evaluating their pupil premium strategies and associated implementation plans. I kept coming back to a quote from Mags Dally (Director of Aspirer Research School) on the EEF Guide to the Pupil Premium​“Deliver and Monitor” page:

​“One of the most daunting but necessary steps is to stop interventions and strategies that are ineffective. Often, these are things we continue simply because they’ve always been done or because we’ve invested time and money in the training and resources.”

The thing is, while challenging to avoid, the sunk cost fallacy is avoidable. Take medical professionals, for example — you do not see them avoiding a change in treatment plan for a patient simply because they have already invested resources into it or because they wish to protect their professional pride. Now, obviously teaching is not as life-and-death as a medical decision, but, as a previous headteacher I worked with always said, ​“our students, and especially our most vulnerable learners, get one shot at an education.” Therefore, it is imperative that we make the right decisions and, if necessary, change course to secure the best outcomes for our students.

Well-planned and effectively delivered pupil premium strategies can be transformational for disadvantaged students, but they also come with significant sunk-cost risk. They normally involve large sums of money alongside considerable manpower, resources, training, and time investment. The thing is, any ineffective pupil premium strategies must be stopped and adapted if we are truly to close the disadvantage gap. But how do we do this when faced with the barriers outlined above?

The risk of falling for the sunk cost fallacy can be reduced if we continually reflect on our approach and establish clear mechanisms for monitoring and evaluation. The EEF pupil premium guidance is a great place to start when looking for ideas to support this.

1. Ensure decisions and reflection are grounded in evidence

Look for a range of data sources that can be used to monitor effectiveness, and consider the appropriateness and potential subjectivity of each of these data sets. Consider how many are rooted in quantitative outcome data and how many come from more qualitative sources — a balance is beneficial. Reflect on whether the data truly captures the impact of your strategy or whether it may be influenced by other factors that obscure its effectiveness.

2. Be realistic

Plan short‑, medium‑, and long-term outcomes to ensure that evaluation of your strategy is ongoing. This may help avoid reaching a point where you realise your strategy is not achieving what you had hoped, but the sunk costs are so high that pulling back feels unfathomable.

3. Monitor for sustainability

Just because your strategy has generated initial positive change from staff, do not assume that this change is embedded. Monitoring the impact of your pupil premium strategy needs to be ongoing to ensure that early progress does not fade.

4. Adapt to changing contexts

Ongoing monitoring also helps us avoid the trap described in adaptive learning theory. Regular monitoring allows us to determine whether the context in which our strategy is operating has changed and, therefore, whether our previous approaches may also need to change. Just because an element of our pupil premium strategy has worked in the past does not mean it will continue to work in the present. Student demographics may change, the barriers they face to success may evolve, and we may therefore need to adapt our approach accordingly.

5. Promote objectivity through collaboration

Promote objectivity by engaging others in the monitoring and evaluation process, whether this be other staff within the school or, as Marc Rowland discusses in this video, school governors and trustees. Governors and trustees can benefit from a degree of detachment from the process and may therefore be more neutral in their evaluation. They should also be provided with the opportunities and information required to both support and challenge the work of school leaders around closing the disadvantage gap.


As Marc says, we need to move towards a position in which evaluation is not viewed as an additional burden, but as a process that we simply cannot afford not to do. If we are to ensure that the strategies we implement to support our most vulnerable learners are — and remain — effective, monitoring and evaluation must be held in the same regard as the steps taken during the initial launch of any intervention.

We simply cannot afford to keep sinking effort into sinking approaches.

Ben Crockett
Co-Director, Durrington Research School


References


Chen, Z., Guney, S., & John, R. (2024). Sunk Cost Effects for Thee but Not for Me: Decisions and Predictions Involving Others.


EEF – The EEF Guide to the Pupil Premium