Comparing parametric and semi-parametric approaches for bayesian cost-effectiveness analyses in health economics

Caterina Conigliani and Andrea Tancredi

No 64, Departmental Working Papers of Economics - University 'Roma Tre' from Department of Economics - University Roma Tre

Abstract: We consider the problem of assessing new and existing technologies for their cost-effectiveness in the case where data on both costs and effects are available from a clinical trial, and we address it by means of the cost-effectiveness acceptability curve. The main difficulty in these analyses is that cost data usually exhibit highly skew and heavytailed distributions, so that it can be extremely difficult to produce realistic probabilistic models for the underlying population distribution, and in particular to model accurately the tail of the distribution, which is highly influential in estimating the population mean. Here, in order to integrate the uncertainty about the model into the analysis of cost data and into cost-effectiveness analyses, we consider an approach based on Bayesian model averaging: instead of choosing a single parametric model, we specify a set of plausible models for costs and estimate the mean cost with its posterior expectation, that can be obtained as a weighted mean of the posterior expectations under each model, with weights given by the posterior model probabilities. The results are compared with those obtained with a semi-parametric approach that does not require any assumption about the distribution of costs. 1 Introduction

Keywords: Healthcare cost data; cost-effectiveness analysis; mixture models; Bayesian model averaging (search for similar items in EconPapers)
JEL-codes: C11 (search for similar items in EconPapers)
Pages: 26
Date: 2006-02
New Economics Papers: this item is included in nep-ecm and nep-hea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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