Cost-Effectiveness Analysis for Policy
Cost-effectiveness analysis (CEA) is an economic evaluation that compares competing policies or programs by their cost relative to a single, common measure of effect — lives saved, cases averted, years of education gained, or quality-adjusted life years (QALYs). Rather than valuing outcomes in money, CEA expresses results as an incremental cost-effectiveness ratio (ICER): the extra cost of one option per extra unit of outcome it delivers compared with the next-best alternative. Codified in standard references such as Drummond and colleagues' Methods for the Economic Evaluation of Health Care Programmes and the US Panel's Cost-Effectiveness in Health and Medicine, CEA is the dominant appraisal tool for health and increasingly for other public programs with a shared outcome metric.
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- Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W. (2015). Methods for the Economic Evaluation of Health Care Programmes (4th ed.). Oxford: Oxford University Press. · ISBN 9780199665877
- Gold, M. R., Siegel, J. E., Russell, L. B., & Weinstein, M. C. (Eds.) (1996). Cost-Effectiveness in Health and Medicine. New York: Oxford University Press. · ISBN 9780195108248
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