A cost-effectiveness calculation leaves out a great deal but it does emphasize aspects that are usually most important and of interest to the decisionmaker. It gives excellent results provided the alternatives are reasonably similar and seek the ultimate goal through the same target so that their effectiveness in attaining that target can be measured on the same scale. Cost-benefit analysis can take into account many more aspects of a decision but it does so at the expense of emphasis and through a great deal of heroic quantification that is extremely arbitrary and is based on the judgment of the analysts, not the policymakers. Multiple cost-effectiveness calculations, including some that do not translate all costs into monetary units, obviously go farther in taking things into account. It has the additional advantage that it not only forces the judgment on the right people but calls their attention to which judgments are needed. (Presented at ORSA/TIMS meeting, Las Vegas, November 17, 1975.)
This report is part of the RAND Corporation Paper series. The paper was a product of the RAND Corporation from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.
This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.