These changes are the impact: the difference in people’s lives (farmers’ output or choice of crops) with and without the intervention, measured after the intervention (information campaign or rainfall insurance) has taken place.

To assess the impact of a project or policy one needs to know what would have happened to the population in its absence. This is called the counterfactual, which is a crucial component of any rigorous impact evaluation, and which can be estimated using a variety of statistical methods. In contrast to monitoring, the use of the counterfactual methods lets policy-makers and other stakeholders establish the causal effects of their programmes and policies.

For example, an impact evaluation might assess the impact of a programme that aims to improve farmer crop yields by offering farmers rainfall insurance. To estimate this impact, one needs to compare the outcomes of farmers who receive rainfall insurance to the hypothetical situation in which the same farmers were not insured.