Projects per year
Abstract
Objectives
Public expenditure aims to achieve social objectives by improving a range of socially valuable attributes of benefit (arguments in a social welfare function). Public expenditure is typically allocated to public sector budgets, where budget holders are tasked with meeting a subset of social objectives.
Methods
Decision makers require an evidence-based assessment of whether a proposed investment is likely to be worthwhile given existing levels of public expenditure. However, others also require some assessment of whether the overall level and allocation of public expenditure is appropriate. This paper proposes a more general theoretical framework for economic evaluation that addresses both these questions.
Results
Using a stylised example of the economic evaluation of a new intervention in a simplified UK context, we show that this more general framework can support decisions beyond the approval or rejection of single projects. It shows that broader considerations about the level and allocation of public expenditure are possible and necessary when evaluating specific investments, which requires evidence of the range of benefits offered by marginal changes in different types of public expenditure and normative choices of how the attributes of benefit gained and forgone are valued.
Conclusions
The proposed framework shows how to assess the value of a proposed investment as well as whether and how the overall level of public expenditure and its allocation across public sector budgets might be changed. It highlights that cost-benefit analysis and cost-effectiveness analysis can be viewed as special cases of this framework, identifying the weakness with each.
Public expenditure aims to achieve social objectives by improving a range of socially valuable attributes of benefit (arguments in a social welfare function). Public expenditure is typically allocated to public sector budgets, where budget holders are tasked with meeting a subset of social objectives.
Methods
Decision makers require an evidence-based assessment of whether a proposed investment is likely to be worthwhile given existing levels of public expenditure. However, others also require some assessment of whether the overall level and allocation of public expenditure is appropriate. This paper proposes a more general theoretical framework for economic evaluation that addresses both these questions.
Results
Using a stylised example of the economic evaluation of a new intervention in a simplified UK context, we show that this more general framework can support decisions beyond the approval or rejection of single projects. It shows that broader considerations about the level and allocation of public expenditure are possible and necessary when evaluating specific investments, which requires evidence of the range of benefits offered by marginal changes in different types of public expenditure and normative choices of how the attributes of benefit gained and forgone are valued.
Conclusions
The proposed framework shows how to assess the value of a proposed investment as well as whether and how the overall level of public expenditure and its allocation across public sector budgets might be changed. It highlights that cost-benefit analysis and cost-effectiveness analysis can be viewed as special cases of this framework, identifying the weakness with each.
Original language | English |
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Number of pages | 7 |
Journal | Value in Health |
DOIs | |
Publication status | Accepted/In press - 29 Jan 2024 |
Bibliographical note
Copyright © 2024 International Society for Pharmacoeconomics and Outcomes Research, Inc. Published by Elsevier Inc. All rights reserved.Keywords
- economic evaluation
- social welfare
- attribute of benefit
- opportunity cost
- marginal value of public funds
Projects
- 1 Finished
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DoH PRP: PRU: ESHCRU II - Economics of Health Systems and Interface with Social Care
Mason, A. R. (Principal investigator), Chalkley, M. J. (Co-investigator), Goddard, M. K. (Co-investigator), Gravelle, H. S. E. (Co-investigator), Gutacker, N. (Co-investigator), Jacobs, R. (Co-investigator), Rice, N. (Co-investigator) & Siciliani, L. (Co-investigator)
1/01/19 → 30/06/24
Project: Research project (funded) › Research