A personalized history of the formal or institutionalized practice of cost and effectiveness comparisons used by public and private organizations in decisionmaking. Cost-effectiveness was not really an organized activity until after World War II. Historically, examples occurred in 11th-century China; 18th-century Bavaria; the U.S. War Department, 1886; and in a study of railway location, 1887. Cost-effectiveness and cost-benefit analysis today — although recently developed from economic theory, practical engineering, and operational analysis — have grown and improved rapidly. They can be improved still more: by following distribution of both costs and benefits; by a more thorough treatment of the social opportunity costs; by considering costs of implementation and organizational change; and by using new analytic methods, such as [n]-person game theory and techniques for systematic application of group judgment and intuition. Cost-effectiveness and cost-benefit analysis still provide only partial answers — not definite and objective conclusions.
Quade, E. S., A History of Cost-Effectiveness. Santa Monica, CA: RAND Corporation, 1971. https://www.rand.org/pubs/papers/P4557.html.
Quade, E. S., A History of Cost-Effectiveness, RAND Corporation, P-4557, 1971. As of December 7, 2023: https://www.rand.org/pubs/papers/P4557.html