Abstract
Economic evaluation is often seen as a branch of health economics divorced from mainstream econometric techniques. Instead, it is perceived as relying on statistical methods for clinical trials. Furthermore, the statistic of interest in cost-effectiveness analysis, the incremental cost-effectiveness ratio is not amenable to regression-based methods, hence the traditional reliance on comparing aggregate measures across the arms of a clinical trial. In this paper, we explore the potential for health economists undertaking cost-effectiveness analysis to exploit the plethora of established econometric techniques through the use of the net-benefit framework - a recently suggested reformulation of the cost-effectiveness problem that avoids the reliance on cost-effectiveness ratios and their associated statistical problems. This allows the formulation of the cost-effectiveness problem within a standard regression type framework. We provide an example with empirical data to illustrate how a regression type framework can enhance the net-benefit method. We go on to suggest that practical advantages of the net-benefit regression approach include being able to use established econometric techniques, adjust for imperfect randomisation, and identify important subgroups in order to estimate the marginal cost-effectiveness of an intervention.
Original language | English (US) |
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Pages (from-to) | 415-430 |
Number of pages | 16 |
Journal | Health Economics |
Volume | 11 |
Issue number | 5 |
DOIs | |
State | Published - 2002 |
Externally published | Yes |
Keywords
- Cost-effectiveness acceptability curve
- Cost-effectiveness analysis using regression
- Econometrics
- Economic evaluation
- Net-benefit framework
ASJC Scopus subject areas
- Nursing(all)
- Economics and Econometrics
- Health(social science)
- Health Professions(all)