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BMJ. 1993 October 9; 307(6909): 924–926.
PMCID: PMC1679054

Cost-benefit analysis.


Cost-benefit analysis is probably the most comprehensive method of economic evaluation available and it can be applied in two ways. The human capital approach means that the value of people's contributions is linked to what they are paid. The approach based on individuals' observed or stated preference means that their personal valuations are placed on an activity by assessing how much money they are prepared to accept for an increased risk or to pay for a particular service. Each method has its disadvantages and the most successful that has been devised so far is the "willingness to pay" (stated preference) approach, though the response to this is to a large extent dependent on the income of the person being questioned. There are still problems with its application, however, so its usefulness is limited.

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Selected References

These references are in PubMed. This may not be the complete list of references from this article.
  • Johannesson M, Jönsson B. Economic evaluation in health care: is there a role for cost-benefit analysis? Health Policy. 1991 Feb;17(1):1–23. [PubMed]
  • Thompson MS. Willingness to pay and accept risks to cure chronic disease. Am J Public Health. 1986 Apr;76(4):392–396. [PubMed]
  • Donaldson C. Willingness to pay for publicly-provided goods. A possible measure of benefit? J Health Econ. 1990 Jun;9(1):103–118. [PubMed]
  • Morrison GC, Gyldmark M. Appraising the use of contingent valuation. Health Econ. 1992 Dec;1(4):233–243. [PubMed]

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