Contingent Valuation Studies and Health Policy

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

U of Penn Law School, Public Law Research Paper No. 10-10

Posted: 20 Feb 2010

Date Written: February, 19 2010

Abstract

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.

Keywords: 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

JEL Classification: I18, K32

Suggested Citation

Adler, Matthew D., Contingent Valuation Studies and Health Policy (February, 19 2010). Health Economics, Policy & Law, Vol. 5, p. 123, 2010; U of Penn Law School, Public Law Research Paper No. 10-10. Available at SSRN: https://ssrn.com/abstract=1555708

Matthew D. Adler (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

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