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This short comment argues that both cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA) should be seen as imperfect tools for evaluating health policy. This is true, not only for extra-welfarists, but even for welfarists, since both CBA and CEA can deviate from the use of social welfare functions (SWF). A simple model is provided to illustrate the divergence between CBA, CEA, and the SWF approach. With this insight in mind, the comment considers the appropriate role of contingent-valuation studies. For full text, please see:


Cost-benefit analysis, CBA, cost-effectiveness analysis, CEA, willingness to pay, willingness to accept, extrawelfarism, welfarism, Kaldor-Hicks principle, social welfare functions, health policy choice, welfare theory

Publication Citation

Health Economics, Policy & Law, Vol. 5, Pg. 123, 2010