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The distribution problem in economic evaluation: income and the valuation of costs and consequences of health care programmes

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  • Cam Donaldson

    (Departments of Economics and Community Health Sciences, and Centre for Health and Policy Studies, University of Calgary, Alberta, Canada)

  • Stephen Birch

    (Department of Clinical Epidemiology and Biostatistics and Centre for Health Economics and Policy Analysis, McMaster University, Canada)

  • Amiram Gafni

    (Department of Clinical Epidemiology and Biostatistics and Centre for Health Economics and Policy Analysis, McMaster University, Canada)

Abstract

To date, a common view in the health economics literature is that the applicability of cost-benefit analysis (CBA) is limited, due to the distribution problem which underlies its main method of valuation (e.g. willingness to pay). One view is that cost effectiveness analysis (CEA) overcomes these problems. We show that the same distributional concerns apply to non-monetary valuations of health consequences, to measurement of costs and to the decision rules of CEA. Hence adopting CEA over CBA cannot be justified on the basis of 'avoiding' distributional considerations. The implications of our results are discussed, including alternative strategies for the use of 'income-based' research findings in social decision-making. Copyright © 2001 John Wiley & Sons, Ltd.

Suggested Citation

  • Cam Donaldson & Stephen Birch & Amiram Gafni, 2002. "The distribution problem in economic evaluation: income and the valuation of costs and consequences of health care programmes," Health Economics, John Wiley & Sons, Ltd., vol. 11(1), pages 55-70.
  • Handle: RePEc:wly:hlthec:v:11:y:2002:i:1:p:55-70 DOI: 10.1002/hec.642
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    References listed on IDEAS

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    1. repec:esr:wpaper:bp2016/2 is not listed on IDEAS
    2. Stephen Birch & Amiram Gafni, 2002. "On being NICE in the UK: guidelines for technology appraisal for the NHS in England and Wales," Health Economics, John Wiley & Sons, Ltd., vol. 11(3), pages 185-191.
    3. Bernard van denBerg & Werner Brouwer & Job van Exel & Marc Koopmanschap, 2005. "Economic valuation of informal care: the contingent valuation method applied to informal caregiving," Health Economics, John Wiley & Sons, Ltd., vol. 14(2), pages 169-183.
    4. Bernard van den Berg & Amiram Gafni & France Portrait, 2013. "Attributing a monetary value to patients’ time: A contingent valuation approach," Working Papers 090cherp, Centre for Health Economics, University of York.
    5. Jennifer Whitty & Emily Lancsar & Kylie Rixon & Xanthe Golenko & Julie Ratcliffe, 2014. "A Systematic Review of Stated Preference Studies Reporting Public Preferences for Healthcare Priority Setting," The Patient: Patient-Centered Outcomes Research, Springer;Johns Hopkins Bloomberg School of Public Health, vol. 7(4), pages 365-386, December.
    6. Callan, Tim & Keane, Claire, 2009. "Non-cash Benefits and the Distribution of Economic Welfare," The Economic and Social Review, Economic and Social Studies, vol. 40(1), pages 49-71.
    7. Liqun Liu & Andrew J. Rettenmaier & Thomas R. Saving, 2008. "Longevity bias in cost-effectiveness analysis," Health Economics, John Wiley & Sons, Ltd., vol. 17(4), pages 523-534.
    8. Laura J. Damschroder & Peter A. Ubel & Jason Riis & Dylan M. Smith, 2007. "An alternative approach for eliciting willingness-to-pay: A randomized Internet trial," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 2, pages 96-106, April.
    9. Birch, Stephen & Gafni, Amiram, 2003. "Economics and the evaluation of health care programmes: generalisability of methods and implications for generalisability of results," Health Policy, Elsevier, vol. 64(2), pages 207-219, May.
    10. David Whynes & Emma Frew & Jane Wolstenholme, 2005. "Willingness-to-Pay and Demand Curves: A Comparison of Results Obtained Using Different Elicitation Formats," International Journal of Health Economics and Management, Springer, vol. 5(4), pages 369-386, December.
    11. Rachel Baker & Angela Robinson, 2004. "Responses to standard gambles: are preferences 'well constructed'?," Health Economics, John Wiley & Sons, Ltd., vol. 13(1), pages 37-48.
    12. Josephine Borghi, 2008. "Aggregation rules for cost-benefit analysis: a health economics perspective," Health Economics, John Wiley & Sons, Ltd., vol. 17(7), pages 863-875.

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