Table 1

The four types of formal economic evaluation

Form of evaluationMeasurement and valuation of outcomes
(1) Cost minimisation analysisOutcomes are assumed to be equivalent. Focus of measurement is on costs. Not often relevant as outcomes are rarely equivalent
(2) Cost effectiveness analysisNatural units (for example, life years gained, deaths prevented) that are common to competing interventions. This approach forms the bulk of published studies and will be of most relevance to practitioners
(3) Cost utility analysisHealth state values based on individual preferences (for example, quality adjusted life years gained). An approach which is gaining in importance due to the need to decide between different interventions at a national level and the importance placed on quality of life. Many methodological problems remain
(4) Cost benefit analysisAll outcomes valued in monetary units (for example, valuation of amount willing to pay to prevent a death). Rarely used due to methodological problems in valuing all outcomes in monetary terms