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Valuing productivity costs using the friction‐cost approach: Estimating friction‐period estimates by occupational classifications for the UK

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  • Jesse Kigozi
  • Sue Jowett
  • Martyn Lewis
  • Pelham Barton
  • Joanna Coast

Abstract

The friction cost approach has been proposed as an alternative to the human capital approach in estimating productivity costs. However, it is difficult, in practice, to apply this approach due to limited availability of context‐specific data. Using national and firm‐level data on vacancy durations sourced from 4 organisations, we estimated vacancy durations, and consequently, length of friction period for the United Kingdom disaggregated by occupational classification. We found comparable estimates to previously reported friction periods elsewhere. The disaggregated friction period analysis confirmed occupational class has an effect on the estimated length of the friction period. The research presents estimates on vacancy durations and friction periods necessary to use the friction cost approach in a practical way in economic evaluations.

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  • Jesse Kigozi & Sue Jowett & Martyn Lewis & Pelham Barton & Joanna Coast, 2017. "Valuing productivity costs using the friction‐cost approach: Estimating friction‐period estimates by occupational classifications for the UK," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 1862-1868, December.
    • Handle: RePEc:wly:hlthec:v:26:y:2017:i:12:p:1862-1868
    DOI: 10.1002/hec.3513
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    References listed on IDEAS

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    1. van Ours, Jan & Ridder, Geert, 1991. "Cyclical variation in vacancy durations and vacancy flows : An empirical analysis," European Economic Review, Elsevier, vol. 35(5), pages 1143-1155, July.
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    6. M. J. Andrews & S. Bradley & D. Stott & R. Upward, 2008. "Successful Employer Search? An Empirical Analysis of Vacancy Duration Using Micro Data," Economica, London School of Economics and Political Science, vol. 75(299), pages 455-480, August.
    7. Beaumont, P B, 1978. "The Duration of Registered Vacancies: An Exploratory Exercise," Scottish Journal of Political Economy, Scottish Economic Society, vol. 25(1), pages 75-87, February.
    8. Jesse Kigozi & Sue Jowett & Martyn Lewis & Pelham Barton & Joanna Coast, 2016. "Estimating productivity costs using the friction cost approach in practice: a systematic review," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(1), pages 31-44, January.
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    Cited by:

    1. Paul Hanly & Rebecca Maguire & Frances Drummond & Linda Sharp, 2019. "Variation in the methodological approach to productivity cost valuation: the case of prostate cancer," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(9), pages 1399-1408, December.
    2. Kathleen Manipis & Stephen Goodall & Paul Hanly & Rosalie Viney & Alison Pearce, 2021. "Employer survey to estimate the productivity friction period," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(2), pages 255-266, March.
    3. Ina Rissanen & Leena Ala-Mursula & Iiro Nerg & Marko Korhonen, 2021. "Adjusted productivity costs of stroke by human capital and friction cost methods: a Northern Finland Birth Cohort 1966 study," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 22(4), pages 531-545, June.
    4. Mennini, Francesco Saverio & Gitto, Lara, 2022. "Approaches to Estimating Indirect Costs in Healthcare: Motivations for Choice," MPRA Paper 112129, University Library of Munich, Germany.
    5. Hanly, Paul & Ortega Ortega, Marta & Pearce, Alison & Soerjomataram, Isabelle & Sharp, Linda, 2020. "Advances in the methodological approach to friction period estimation: A European perspective," Social Science & Medicine, Elsevier, vol. 264(C).
    6. Jonas Steel & Lode Godderis & Jeroen Luyten, 2018. "Methodological Challenges in the Economic Evaluation of Occupational Health and Safety Programmes," IJERPH, MDPI, vol. 15(11), pages 1-12, November.

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