Resource Pack: Introduction to Benefit-Cost Analysis
2024
This resource pack, curated by the Center for Health Decision Science, introduces the theory and practice of benefit-cost analysis. It is targeted towards advanced students as well as practitioners and those interested in teaching benefit-cost analysis.
Benefit-cost analysis (also referred to as cost-benefit analysis) is a well-established and widely-used form of economic evaluation. It is designed to inform policy and other decisions by providing evidence on the consequences of alternative interventions. In benefit-cost analysis, all impacts are measured in monetary units, including both health and non-health outcomes. By using money as a common metric, it allows the simultaneous, integrated consideration of multiple consequences and provides information on the intensity as well as the direction of individual preferences. Money is not important per se; rather it is used as a convenient measure of the trade-offs individuals and societies are willing to make. The summary measure is usually net benefits (benefits minus costs), although the ratio (benefits divided by costs) may also be reported as long as impacts are categorized consistently. In addition, analysts should also estimate how the benefits and costs are distributed across individuals in different income and other groups. The results can be combined with information on non-quantifiable effects, on legal, technical, budgetary, and political constraints, on ethical concerns, and on other factors, to provide the evidence-base for decision-making. In addition to the resources in this pack, those interested in the use of these methods in low- and middle-income countries may wish to review the CHDS BCA in Low- and Middle-Income Countries resource pack.
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Source:
Resource Pack: Introduction to Benefit-Cost Analysis. Center for Health Decision Science, Harvard T.H. Chan School of Public Health 2024. http://repository.chds.hsph.harvard.edu/repository/collection/resource-pack-introduction-benefit-cost-analysis