Abstract
Recently, there has been much interest in using the cost-effectiveness acceptability curve (CEAC) to measure the statistical evidence of cost-effectiveness. The CEAC has two well established but fundamentally different interpretations: one frequentist and one Bayesian. As an alternative, we suggest characterizing the statistical evidence about cost-effectiveness using the likelihood function (the key element of both approaches). Its interpretation is neither dependent on the sample space nor on the prior distribution. Moreover, the probability of observing misleading evidence is low and controllable, so this approach is justifiable in the traditional sense of frequentist long-run behaviour. We propose a new graphic for displaying the evidence about cost-effectiveness and explore the strengths of likelihood methods using data from an economic evaluation of a Program in Assertive Community Treatment (PACT).
| Original language | English (US) |
|---|---|
| Pages (from-to) | 476-495 |
| Number of pages | 20 |
| Journal | Journal of Health Economics |
| Volume | 27 |
| Issue number | 2 |
| DOIs | |
| State | Published - Mar 2008 |
| Externally published | Yes |
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Keywords
- Cost-effectiveness analysis
- Likelihood methods
- Net benefit regression framework
ASJC Scopus subject areas
- Health Policy
- Public Health, Environmental and Occupational Health
Cite this
Measuring and illustrating statistical evidence in a cost-effectiveness analysis. / Hoch, Jeffrey S; Blume, Jeffrey D.
In: Journal of Health Economics, Vol. 27, No. 2, 03.2008, p. 476-495.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Measuring and illustrating statistical evidence in a cost-effectiveness analysis
AU - Hoch, Jeffrey S
AU - Blume, Jeffrey D.
PY - 2008/3
Y1 - 2008/3
N2 - Recently, there has been much interest in using the cost-effectiveness acceptability curve (CEAC) to measure the statistical evidence of cost-effectiveness. The CEAC has two well established but fundamentally different interpretations: one frequentist and one Bayesian. As an alternative, we suggest characterizing the statistical evidence about cost-effectiveness using the likelihood function (the key element of both approaches). Its interpretation is neither dependent on the sample space nor on the prior distribution. Moreover, the probability of observing misleading evidence is low and controllable, so this approach is justifiable in the traditional sense of frequentist long-run behaviour. We propose a new graphic for displaying the evidence about cost-effectiveness and explore the strengths of likelihood methods using data from an economic evaluation of a Program in Assertive Community Treatment (PACT).
AB - Recently, there has been much interest in using the cost-effectiveness acceptability curve (CEAC) to measure the statistical evidence of cost-effectiveness. The CEAC has two well established but fundamentally different interpretations: one frequentist and one Bayesian. As an alternative, we suggest characterizing the statistical evidence about cost-effectiveness using the likelihood function (the key element of both approaches). Its interpretation is neither dependent on the sample space nor on the prior distribution. Moreover, the probability of observing misleading evidence is low and controllable, so this approach is justifiable in the traditional sense of frequentist long-run behaviour. We propose a new graphic for displaying the evidence about cost-effectiveness and explore the strengths of likelihood methods using data from an economic evaluation of a Program in Assertive Community Treatment (PACT).
KW - Cost-effectiveness analysis
KW - Likelihood methods
KW - Net benefit regression framework
UR - http://www.scopus.com/inward/record.url?scp=40849139251&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=40849139251&partnerID=8YFLogxK
U2 - 10.1016/j.jhealeco.2007.07.002
DO - 10.1016/j.jhealeco.2007.07.002
M3 - Article
C2 - 18179834
AN - SCOPUS:40849139251
VL - 27
SP - 476
EP - 495
JO - Journal of Health Economics
JF - Journal of Health Economics
SN - 0167-6296
IS - 2
ER -