Fairness in cost-benfit analysis: an application to health technology assessment

Anne-Laure Samson, Erik Schokkaert, Clémence Thébaut, Brigitte Dormont, Marc Fleurbay, Stéphane Luchini and Carine Vande Voorde

No 515268, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: We evaluate the introduction of various forms of antihypertensive treatment in France with a distribution-sensitive cost-benefit analysis. Compared to traditional cost-benefit analysis, we implement distributional weighting based on equivalent incomes, a new concept of individual well-being that does respect individual preferences but is not subjectively welfarist. Individual preferences are estimated on the basis of a contingent valuation question, introduced into a representative survey of the French population. Compared to traditional cost-effectiveness analysis in health technology assessment, we show that it is practically feasible to go beyond a narrow evaluation of health outcomes while still fully exploiting the technical sophistication of medical information. Sensitivity analysis illustrates the relevancy of this richer welfare framework, the importance of the distinction between an ex ante and an ex post-approach, and the need to consider distributional effects in a broader institutional setting.

Date: 2015-11
Note: paper number DPS 15.26
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Published in CES - Discussion paper series,, pages 1-49

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