A Note on Confidence Intervals in Cost-Effectiveness Analysis

Magnus Tambour (), Niklas Zethraeus () and Magnus Johannesson
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Magnus Tambour: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden
Niklas Zethraeus: Dept. of Economics, Stockholm School of Economics, Postal: P.O. Box 6501, S-113 83 Stockholm, Sweden

No 181, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: How to obtain confidence intervals for cost-effectiveness ratios is complicated by the statistical problems to obtain a confidence interval for a ratio of random variables. Different approaches have been suggested in the literature, but no consensus has been reached. In this note we propose an alternative simple solution to this problem. By multiplying the effectiveness units by the price per effectiveness unit, both costs and benefits can be expressed in monetary terms and standard statistical techniques can be used to estimate a confidence interval for net benefits. This avoids the ratio estimation problem and explicitly recognizes that the price per effectiveness unit has to be known to provide cost-effectibeness analysis with a useful decision rule.

Keywords: Confidence intervals; Cost-effectiveness ratios; Cost-effectiveness analysis; Economic evaluation (search for similar items in EconPapers)
JEL-codes: D61 D81 H43 I10 (search for similar items in EconPapers)
Pages: 8 pages
Date: 1997-08-13
New Economics Papers: this item is included in nep-hea and nep-pub
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Citations: View citations in EconPapers (22)

Published in International Journal of Technology Assessment in Health Care, 1998, pages 467-471.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0181

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