Cover: A Critique of Cost-Effectiveness

A Critique of Cost-Effectiveness

Published 1975

by E. S. Quade

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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.)

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