Economic Foundations of Cost Effective Analysis /
Garber, Alan M.
Economic Foundations of Cost Effective Analysis / Alan M. Garber, Charles E. Phelps. - Cambridge, Mass. National Bureau of Economic Research 1992. - 1 online resource: illustrations (black and white); - NBER working paper series no. w4164 . - Working Paper Series (National Bureau of Economic Research) no. w4164. .
September 1992.
In order to address several controversies in the application of cost-effectiveness analysis, we investigate the principles underlying the technique and discuss the implications for the evaluation of medical interventions. Using a standard von Neumann-Morgenstern utility framework, we show how a cost-effectiveness criterion can be derived to guide resource allocation decisions. We investigate its relation to age, gender, income level, and risk aversion. Cost-effectiveness analysis can be a useful and powerful tool for resource allocation decisions, but in the presence of heterogeneous preferences and personal characteristics, a cost-effectiveness criterion that is applied at the population level is unlikely to yield pareto-optimal resource allocations.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Economic Foundations of Cost Effective Analysis / Alan M. Garber, Charles E. Phelps. - Cambridge, Mass. National Bureau of Economic Research 1992. - 1 online resource: illustrations (black and white); - NBER working paper series no. w4164 . - Working Paper Series (National Bureau of Economic Research) no. w4164. .
September 1992.
In order to address several controversies in the application of cost-effectiveness analysis, we investigate the principles underlying the technique and discuss the implications for the evaluation of medical interventions. Using a standard von Neumann-Morgenstern utility framework, we show how a cost-effectiveness criterion can be derived to guide resource allocation decisions. We investigate its relation to age, gender, income level, and risk aversion. Cost-effectiveness analysis can be a useful and powerful tool for resource allocation decisions, but in the presence of heterogeneous preferences and personal characteristics, a cost-effectiveness criterion that is applied at the population level is unlikely to yield pareto-optimal resource allocations.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.