Child Care and Development Fund (CCDF) Lead Agencies are required to consider cost information when setting payment rates. Many Agencies meet this requirement by doing a narrow cost analysis. This brief has three goals:

• define narrow cost analysis;
• define and discuss child care costs and prices; and
• explain how narrow cost analysis helps inform payment rates.

It is the first in a three-part series. Approaches to Narrow Cost Analysis offers examples and expert advice on how to do a good narrow cost analysis. Using a Narrow Cost Analysis to Inform Payment Rates describes how to use cost data when setting payment rates. 

Please see the Building Child Care Research Capacity web page for additional products aimed at helping CCDF Lead Agencies use data and research to make informed policy decisions.