ABSTRACT
It is important to establish a clear view of what the costs (inputs) and benefits (outputs) of any intervention may be. All interventions assessing health and social need require some form of cost-analysis or evidence of effectiveness. Most people when they talk of ‘cost’ usually think in economic or monetary terms, however, ‘costs’ refer to all types of inputs such as the context of the intervention (the premises), the planned content, the number of staff, their skills and training needs, knowledge input, budgets, equipment and buildings etc. Benefits on the other are consequences arising from the outputs, e.g. more people claiming benefits, less people smoking, reduced teenage pregnancies, less accidents in the home, improved childcare facilities, housing conditions improved, increased employment etc. Economic evaluation does not have the objective of improving the quality of life ‘at lowest cost’, rather it is concerned with efficiency, i.e. the relation between benefits and costs, and should be seen as providing a set of techniques for the identification and measurement of efficiency.
